Question: The demand for a certain product has shown to be relatively stable; its sales are not subject to any seasonal influence, and demand is not

The demand for a certain product has shown to be

The demand for a certain product has shown to be relatively stable; its sales are not subject to any seasonal influence, and demand is not expected to change in the future. In fact, during the last 10 lead times, the following demand was observed: 65 52 | 49 33 92 23 47 55 43 45 Assume that these are the only values that the demand can take, each with a 0.1 probability of occurring. (a) Probabilities of positive shortages when reorder points are: 52, 53, 54, 55 (b) The various possible shortage sizes and their probabilities of occurrence, when reorder points are: 52, 53, 54, 55. (c) The expected (or average) shortages, when reorder points are: 52, 53, 54, 55. (d) What reorder point would you use if the average shortage was to be no larger than 4 units? What is the associated probability of a stockout

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