Bens Machine Shop needs to purchase brackets from its vendor The purchase price of each bracket is $ 13 The ordering cost is $ 150 per order and it is fixed The vendor is located 100 KM away, so the shop manager needs to wait for 10 days for the order to arrive The annual inventory carrying cost is $ 1 50 per unit The daily usage follows a normal distribution with the mean of 20 units and variance of 9 units 2 The shop manager uses the continuous review inventory system Assume that Benss Machine Shop operates 250 days during the year a) what is the optimal order quantity b) what is that total annual inventory cost c)If Arthurs Machine Shop Manager wants to keep the shortage probability to no more than 2 5 , what is the reorder point (keep the final solution to the closest whole number)

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Question: Bens Machine Shop needs to purchase brackets from its vendor. The purchase price of each bracket is $ 13. The ordering cost is $ 150

Bens Machine Shop needs to purchase brackets from its vendor. The purchase price of each bracket is $ 13. The ordering cost is $ 150 per order and it is fixed. The vendor is located 100 KM away, so the shop manager needs to wait for 10 days for the order to arrive. The annual inventory carrying cost is $ 1.50 per unit.

The daily usage follows a normal distribution with the mean of 20 units and variance of 9 units². The shop manager uses the continuous review inventory system. Assume that Benss Machine Shop operates 250 days during the year.

a) what is the optimal order quantity?

b) what is that total annual inventory cost?

c)If Arthurs Machine Shop Manager wants to keep the shortage probability to no more than 2.5%, what is the reorder point? (keep the final solution to the closest whole number)

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