The new office supply discounter, Paper Clips, Etc. (PCE), sells a certain type of ergonomically correct office
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Question:
The new office supply discounter, Paper Clips, Etc. (PCE), sells a certain type of ergonomically correct office chair that costs $300. The annual holding cost rate is $120 per unit per year, annual demand is 900 units, and the ordering cost is $20 per order. The lead time is 4 days. Because demand is variable (standard deviation of daily demand is 2.4 units per day), PCE has decided to establish a customer service level of 91%. The store is open 300 days per year. a. What is the optimal order quantity?
b. What is the reorder point?
Related Book For
Quality Inspired Management The Key to Sustainability
ISBN: 978-0131197565
1st edition
Authors: Harold Aikens
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