The note below is for the demand distribution of our chips. We recognize the yearly carrying...

 

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The note below is for the demand distribution of our chips. We recognize the yearly carrying cost for our inventory is 25% of the item value, and the current purchasing price from the supplier is $30 each. It takes $25 to place an order every time, and the lead time for delivery is 54 days given that 30 days in a month. Besides, we implement a policy of maintaining a 99% customer service level. Demand/Month12, 13, 14, 15, 16, 17, 18, 19 Probability0.1, 0.15, 0.15, 0.2, 0.2, 0.1, 0.05, 0.05 How should the inventory be managed for profitability? Be as specific as possible The note below is for the demand distribution of our chips. We recognize the yearly carrying cost for our inventory is 25% of the item value, and the current purchasing price from the supplier is $30 each. It takes $25 to place an order every time, and the lead time for delivery is 54 days given that 30 days in a month. Besides, we implement a policy of maintaining a 99% customer service level. Demand/Month12, 13, 14, 15, 16, 17, 18, 19 Probability0.1, 0.15, 0.15, 0.2, 0.2, 0.1, 0.05, 0.05 How should the inventory be managed for profitability? Be as specific as possible

Answer rating: 100% (QA)

To manage the inventory for profitability we can use the Economic Order Quantity EOQ model along with the reorder point to ensure optimal inventory le... View the full answer