Bell Helicopter produces a spare part with ordering cost of $2,000, inventory carrying cost of $400/unit/year, stock

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Bell Helicopter produces a spare part with ordering cost of $2,000, inventory carrying cost of $400/unit/year, stock out cost of $1,850 per unit short, an annual requirement of 494 units, and one-week replenishment lead time. Demand during replenishment lead time has the following probability distribution:


Find the minimum-cost lot size and reorder point.

d̟ = > (P(D) × D) = 14.22 = 14 units

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