Weekly demand for electric motors at a Japanese motor manufacturer is normally distributed, with a mean of
Question:
Weekly demand for electric motors at a Japanese motor manufacturer is normally distributed, with a mean of 1,000 and a standard deviation of 1,000. Motors are currently assembled in China and delivered at a cost of 20,000 yen/motor. The supplier takes eight weeks to supply an order. A local Japanese manufacturer has offered to deliver motors with a lead time of one week at a cost of 20,400 yen per motor. The motor manufacturer is targeting a CSL of 99 percent and monitors its inventory continuously. The manufacturer incurs an annual holding cost of 25 percent. Should the manufacturer accept the local supplier’s offer?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Supply Chain Management Strategy Planning And Operation
ISBN: 9781292257891
7th Global Edition
Authors: Sunil Chopra
Question Posted: