Question: A new logistics analyst has approached you regarding a potential problem. Her analysis indicates the cost of a back order is $70 for our Autographed

A new logistics analyst has approached you regarding a potential problem. Her analysis indicates the cost of a back order is $70 for our Autographed Footballs, but she is not sure what the appropriate safety stock should be. Given this back order cost, what would you suggest as the appropriate level of safety stock?

Football cost $200

Annual Demand 5000 units

Cost per Order $250

Cost to hold the item per year 40%

Economic order quantity 177

Lead Time 2 weeks

Standard Deviation of Forecasted Demand During Lead Time 20

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