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

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 probability of a stock out would be appropriate to use to manage the inventory levels? Football cost $200 5000 units $250 Annual Demand Cost per Order Cost to hold the item per year Economic order quantity Lead Time 40% 177 2 weeks Standard Deviation of Forecasted Demand During Lead Time 20 O 10% 5% 4% O 1%

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