Question: A local store replenishes espresso makers using a ( Q , R ) policy with Q = 250 and R = 98. The average annual

A local store replenishes espresso makers using a (Q, R) policy with Q = 250 and R = 98. The average annual demand for the machine equals 2,200 units, and its lead time demand has expected value 60 and standard deviation 20. Demands that occur when the machine is out of stock are backordered, and it costs $50 per unit per year to hold in inventory. What is the imputed value of the shortage cost p?

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