Assume a car dealer that faces a constant demand for 5,000 cars per year, and that...
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Assume a car dealer that faces a constant demand for 5,000 cars per year, and that it costs $15,000 to have the cars shipped to the dealership. Holding cost is estimated at $500 (H) per car per year. A [3 pts].If the lead time to receive cars is 10 days, when should the dealer place her orders? B [5 pts]. Now assume that the demand is variable with the mean yearly demand of 5, 000 units and the standard deviation of daily demand of 6 units. When should the dealer reorder if she would like to meet the demand 95% of the time? C [2 pts]. What is the level of safety inventory? How does it change if there is also uncertainty in the lead time? Briefly explain why. Assume a car dealer that faces a constant demand for 5,000 cars per year, and that it costs $15,000 to have the cars shipped to the dealership. Holding cost is estimated at $500 (H) per car per year. A [3 pts].If the lead time to receive cars is 10 days, when should the dealer place her orders? B [5 pts]. Now assume that the demand is variable with the mean yearly demand of 5, 000 units and the standard deviation of daily demand of 6 units. When should the dealer reorder if she would like to meet the demand 95% of the time? C [2 pts]. What is the level of safety inventory? How does it change if there is also uncertainty in the lead time? Briefly explain why.
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Related Book For
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright
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