Question: A supplier for an electronics store has introduced quantity discounts to encourage larger order quantities of cameras. The price schedule is: Price per unit Quantity

A supplier for an electronics store has

A supplier for an electronics store has introduced quantity discounts to encourage larger order quantities of cameras. The price schedule is: Price per unit Quantity purchased fewer than 525 at least 525 $80 $75 Suppose the monthly demand at a retail store that buys from this retailer and resells is 175 units. The supplier charges a fixed cost of $180 per shipment. The cameras are expected to sell well for multiple seasons, so multiple replenishment opportunities are possible. What is the stock-out probability the retailer achieves by setting the reorder point to 800 units if the standard deviation of the monthly demand is 20 and the supplier can guarantee a 4-month lead time? (Note: Use the z-table from the lecture notes, and choose the closest answer.) 10.15% O 5.5% OOOO O 2.0% 0.62%

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