Notation D OD L OL k . P $ Value Measurement 620 units per year 110 units per year 0.08 years 0.03 years 30% per year per dollar of average inventory 6.80 per unit 2.04 per unit per year 3.20 per unit backordered 220.00 per order units units per lead time 36.2 units per lead time =SQRT(L*sD^2+D^2*sL^ 2) $ $ $ S Parameter Mean annual demand Standard deviation of annual demand Mean lead time Standard deviation of lead time Inventory holding cost factor (annual) Unit purchase cost Holding cost per unit per year Backordering cost per unit Ordering cost per order Order quantity Mean demand during the lead time Standard deviation of demand during the lead time Type 1 service level Standard normal variate Safety stock Expected units out of stock during the lead time Type 2 service level Reorder point Annual Cycle Stock Holding Cost Annual Safety Stock Holding Cost Annual Ordering Cost Annual Backordering Cost Annual Total Relevant Logistics Cost DL units 14.5 units per cycle =sDL*NORMDIST(2,0,1,0)- SS*(1-NORMDIST(2,0,1,1)) ODL alpha z SS nR beta R CSHC SSHC OC BC G(Q,R) units per year per year per year per year per year 1. What is the optimal order quantity? 2. What is the optimal safety stock level? 3. What is the optimal fill rate (beta)? 4. What is the total annual inventory (cycle stock and safety stock) holding cost? 5. What is the total annual relevant logistics cost in the optimum? 6. What is the optimal in-stock rate (alpha)? Notation D OD L OL k . P $ Value Measurement 620 units per year 110 units per year 0.08 years 0.03 years 30% per year per dollar of average inventory 6.80 per unit 2.04 per unit per year 3.20 per unit backordered 220.00 per order units units per lead time 36.2 units per lead time =SQRT(L*sD^2+D^2*sL^ 2) $ $ $ S Parameter Mean annual demand Standard deviation of annual demand Mean lead time Standard deviation of lead time Inventory holding cost factor (annual) Unit purchase cost Holding cost per unit per year Backordering cost per unit Ordering cost per order Order quantity Mean demand during the lead time Standard deviation of demand during the lead time Type 1 service level Standard normal variate Safety stock Expected units out of stock during the lead time Type 2 service level Reorder point Annual Cycle Stock Holding Cost Annual Safety Stock Holding Cost Annual Ordering Cost Annual Backordering Cost Annual Total Relevant Logistics Cost DL units 14.5 units per cycle =sDL*NORMDIST(2,0,1,0)- SS*(1-NORMDIST(2,0,1,1)) ODL alpha z SS nR beta R CSHC SSHC OC BC G(Q,R) units per year per year per year per year per year 1. What is the optimal order quantity? 2. What is the optimal safety stock level? 3. What is the optimal fill rate (beta)? 4. What is the total annual inventory (cycle stock and safety stock) holding cost? 5. What is the total annual relevant logistics cost in the optimum? 6. What is the optimal in-stock rate (alpha)