Question: Chairish - Is - The - World ( CITW ) , Inc., manufactures top - end hardwood chairs that are sold through a variety of
ChairishIsTheWorld CITW Inc., manufactures topend hardwood chairs that are sold through a variety of retail outlets. Each chair takes month lead time to go through the production line. The most popular model sells for $ per chair and costs $ to make. Past data show that average monthly demand is chairs with a standard deviation of chairs and that the normal distribution is a reasonable fit. CITW uses annual interest charge to estimate inventory carrying cossts
Assume that orders can be backlogged and the cost of lost customer goodwill from carrying a single chair on backorder is $ a month. What would be the optimal reorder level r in terms of costStill use Base Stock model.
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