We will choose the value of safety stock that minimizes the total incremental costThe incremental cost is a sum of the stockout cost and the carrying cost The value of safety stock is always less than or equal to the reorder point Here, the reorder point 200 kg Hence, we will calculate the incremental cost for the following three cases Case 1 Safety Stock 0 kg When safety stock is 0 kg, the maximum demand we can meet is 200 kg (Since the reorder point is 200kg) Hence, if the deman

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A binding greater than or equal to constraint in ... View the full answer