Question: 1 . The historical data maintained by an electric water pump manufacturer show that the model PL 4 0 with flow rate of (
The historical data maintained by an electric water pump manufacturer show that the model PL with flow rate of mathrmlmathrmmin has an annual demand of pumps. The company needs to purchase the electric motor required for this pump from a specialised manufacturer and maintain sufficient stock in the inventory to manage the daily production of water pumps without disruptions. The daily need of electric motors for production shows a normal distribution with a standard deviation of electric motors a day. The supplier takes days to supply the motors once an order is placed. The estimated ordering cost is $ per order and the annual holding cost per motor is $ The company operates days a year.
a Estimate the economic order quantity EOQ for the electric motors.
b Estimate the reorder point ROP to maintain a service level of
c What is the annual holding cost of electric motors?
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