Answer for part A: Order up to level = 1938

A company manufactures plumbing fixtures which are sold by several distributors. Their top model sells for $750 per fixture; it costs $600 to produce. Learning from past statistics, the monthly demand is normally distributed with average of 1,600 units and a standard deviation of 300 units. Assume: 15% annual interest to estimate carrying cost; negligible setup cost; backorder cost is $50/unit/month. a. If the company orders once a month and all unfulfilled orders from distributors are backordered, what would you recommend as the order up to level (up to Q) in this case? b. If the company orders once a month and all the unfulfilled orders are lost, what order up to level would you recommend? Explain the difference from (a). A company manufactures plumbing fixtures which are sold by several distributors. Their top model sells for $750 per fixture; it costs $600 to produce. Learning from past statistics, the monthly demand is normally distributed with average of 1,600 units and a standard deviation of 300 units. Assume: 15% annual interest to estimate carrying cost; negligible setup cost; backorder cost is $50/unit/month. a. If the company orders once a month and all unfulfilled orders from distributors are backordered, what would you recommend as the order up to level (up to Q) in this case? b. If the company orders once a month and all the unfulfilled orders are lost, what order up to level would you recommend? Explain the difference from (a)