Question: Each week, a computer store sells an average of 1 0 0 sets of audio speakers. Weekly demand is normally distributed with a standard deviation
Each week, a computer store sells an average of sets of audio speakers. Weekly demand is normally distributed with a standard deviation of sets. The store orders speakers from a national distributor. Each order is filled in two weeks. The cost of placing each order is $ and the weekly cost of holding one set of speaker in inventory is $ The perunit stockout cost is assumed to be $ The store is willing to assume that all demand is backlogged.
a
Determine a good size of order.
b
Determine a good reorder point.
c What is the safety stock level?
d If the new order is not always filled in one week, instead, the time for the new order to arrive has a mean of week and standard deviation of week. Determine a good size of order.
e Continue part d determine a good reorder point.
You have to use the following critical point for standard normal distribution: If you can not find the exact number, please use the closest number as an approximation.
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