Question: (Basic EOQ Probabilistic Model). The daily demand for photographic film in a gift shop at a tourist site has a normal distribution with 30 rolls
(Basic EOQ Probabilistic Model). The daily demand for photographic film in a gift shop at a tourist site has a normal distribution with 30 rolls of film. gift store, in a tourist site, has normal distribution with 30 average rolls of film and 5 standard deviation rolls. The cost of keeping a roll of film in the store is $0.02 per day. The cost of keeping a roll of film in the store is $0.02 per day. The store incurs a fixed cost of $30 each time it places an order for rolls of film. The store incurs a fixed cost of $30 each time it orders rolls of film. The store's inventory policy calls for ordering 150 rolls of film when the inventory level drops to 80 when the inventory level drops to 80 units, while at the same time maintaining a constant stock of 20 rolls of film at all times. a constant stock of 20 rolls at all times. a) For this inventory policy, determine the probability of running out of rolls of film during the delivery time. during the lead time. b) Using these data, recommend an inventory policy to the store, assuming that the probability of running out of rolls during lead time is no greater than 0.10.
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