The daily demand for a particular type of printed circuit board in an assembly shop can assume

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The daily demand for a particular type of printed circuit board in an assembly shop can assume one of the following values: 100, 120 or 130 with probabilities 0.2, 0.3 and 0.5. The manager of the shop thus is limiting her alternatives to stocking one of the three levels indicated. If she prepares more boards than are needed in the same day, then she must reprocess those remaining at a cost price of 55 cents/board. Assuming that it costs 60 cents to prepare a board for assembly and that each board produces $1.05 in revenue, find the optimal stocking level by using a decision tree model.

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Project Management Processes Methodologies And Economics

ISBN: 9780130413314

2nd Edition

Authors: Avraham Shtub, Jonathan F. Bard, Shlomo Globerson

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