Question: 7.Daily demand for a detergent at DMart is normally distributed, with a mean of 200 packets and a standard deviation of 50: The replenishment lead

7.Daily demand for a detergent at DMart is normally distributed, with a mean of 200 packets and a standard deviation of 50: The replenishment lead time from the supplier is three days. The current inventory policy at DMart is to order 1000 packets when the quantity on hand drops below 500. Each packet costs Rs.500, and the DMart uses a holding cost of 25 percent. [2.5+2.5+3] a) If all unfilled demand is assumed to be backlogged and carried over to the next cycle, what cost of understocking justifies the current policy? b) If all unfilled demand is assumed to be lost, what cost of stocking out justifies the current policy? (c) DMart feels that all unfilled demand can be backlogged if customers are given a Rs. 200 discount on their next purchase (effectively making the cost of understocking Rs. 200). What inventory policy do you recommend for DMart

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