Question: Demand for widgets is normally distributed with a daily average of 3 0 units, standard deviation of 4 units. Lead time from the supplier is
Demand for widgets is normally distributed with a daily average of units, standard deviation of units. Lead time from the supplier is days. Order costs are $ per order. Holding cost is $ per unit per year.
a What is the optimal order size?
b What ROP should be used to maintain a service level?
c What would the total cost of the system you calculated in parts a and b be
d When would a fixed period system be preferable to a fixed quantity system?
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