Question: a ) Suppose that in the above problem the stock - out cost is replaced with a Type 1 service objective of 9 5 percent.
a Suppose that in the above problem the stockout cost is replaced with a Type service
objective of percent. Find the optimal values of Q R in this case.b
b Suppose that in problem a Type service objective of percent is substituted for the
stockout cost of $ Find the resulting values of Q and R Also, what is the imputed cost
of shortage for this case?
c Suppose that the warehouse from problem mistakenly used a Type service objective when
it really meant to use a Type service objective see problems a and b What is the additional
holding cost incurred each year for this item because of this mistake?
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