Question: Under the current daily demand pattern, what is the annual demand rate ( D ) ? Daily demand for an an inventory item is normally

Under the current daily demand pattern, what is the annual demand rate (D) ?

Daily demand for an an inventory item is normally distributed with average value of 40 units per day The standard deviation of daily demand is 6 The item is used 365 days per year We buy the item for $80 per unit Each time we order, we incur fixed ordering costs of $150 per order Our annual carrying cost rate is 25% When we order replenishment inventory, the order lead time is 6 days The ordering.policy currently being used is: Whenever inventory position falls to R=280 units, an order is placed for Q=700 units

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