Question: Continuing from example 4 , it was observed that the daily demand during lead - time varies in such a way that it follows Norman

Continuing from example 4, it was observed that the daily demand during lead-time varies in such a way that it follows Norman distribution of mu =35.5 and lambda =81. The management wants to be at 90% service level. The ordering cost, Co is $150/ order with perchase price of $5.00/ yard with 10 store-days of lead-time. Recall Cc = $0.75 per year per yard with D =10,000 yards per year. The facility operates 311 days/year. Determine the optimal order size, safety stock quantity, re-order point, and total inventory cost.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!