Question: answer clearly using the formulas I will rate Cassorla's Clothes sells a large number of white dress shirts. The shirts, which bear the store label,
answer clearly using the formulas I will rate
Cassorla's Clothes sells a large number of white dress shirts. The shirts, which bear the store label, are shipped from a manufacturer in New York City. Hy Cassorla, the proprietor, says, "I want to be sure that I never run out of dress shirts. I always try to keep at least a two months' supply in stock. When my inventory drops below that level, I order another two-month supply. I've been using that method for 20 years, and it works." The shirts cost $6 each and sell for $15 each. The cost of processing an order and receiving new goods amounts to $80, and it takes three weeks to receive a shipment. Monthly demand is approximately normally distributed with mean 120 and standard deviation 32. Assume a 20 percent annual interest rate for computing the holding cost.
A) What should be the performance of a (s,S) model if Cassorla has 50 units during the review period?
B) What could be the (s,T) model policies by using an alpha (a) of 95% and a beta (B) of 90%?




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