A part is demanded at the rate of 400 per week. The part is purchased from a

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A part is demanded at the rate of 400 per week. The part is purchased from a supplier in Asia, and the lead time is five weeks. The standard deviation of demand during the lead time is 50 units. If the company wants to have a service level of 97.5%, how much safety stock should the company hold for this part? If the opportunity for the company is estimated to be 20% and the part costs $75, what is the annualized cost of the safety stock required to achieve the desired service level?
Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...

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Managing Supply Chain and Operations An Integrative Approach

ISBN: 978-0132832403

1st edition

Authors: Thomas Foster, Scott E. Sampson, Cynthia Wallin, Scott W Webb

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Question Posted: Nov 28, 2015 07:06 AM

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A part is demanded at the rate of 400 per week. The part is purchased from a

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R s R SS R 4005 19650 2098 ...View the full answer

Managing Supply Chain and Operations An Integrative Approach

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