A firm experiences demand with a mean of 100 units per day. Lead time demand is normally
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A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed with mean 1000 units and standard deviation 200 units. It costs $6 to hold one unit for one year. If the firm wants to meet 90% of all demand on time, what is the expected annual cost of holding safety stock? Assume that each order costs $50.
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Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright
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