High Plains Inc. manufacturers furniture in North Dakota. High Plains receives its wood from a lumber yard
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High Plains Inc. manufacturers furniture in North Dakota. High Plains receives its wood from a lumber yard in Calgary. The lead time for orders is 3 weeks. One of their boards costs $15 per unit and the holding cost for this board is $0.5 per week. They manage their inventory to achieve a 99.0 in-stock probability. Weekly demand is for 250 boards with a standard deviation of 200.
a. How many boards do they have on order on average?
b. How many boards do they have on hand on average?
c. For this board what is the total holding cost incurred per week?
d. What is the holding cost they incur per board?
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Related Book For
Operations Management
ISBN: 9781260547610
2nd International Edition
Authors: Gerard Cachon, Christian Terwiesch
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