Question: Problem 2 The demand faced by CBA company each week is estimated to be normally distributed with a mean of 1000 units and a standard

Problem 2

The demand faced by CBA company each week is estimated to be normally distributed with a mean of 1000 units and a standard deviation of 250. Lead time of delivery is fixed at 2 weeks. Ordering cost is $800 per order, variable cost per unit ordered is $4, the inventory carrying charge is 20% per year. Assume 50 weeks per year. CBA would like the probability to satisfy customer demand be 95%. Find the (Q,R) policy.

If the leadtime is a random variable with a mean of 2 weeks and a standard deviation of 1 week. Find the (Q,R) policy.

What is the impact of the weekly demands standard deviation on the (Q,R) policy?

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