Question: You may need to use the appropriate technology to answer this question. A health and nutrition store stocks a multivitamin with an annual demand of

You may need to use the appropriate technology to answer this question.
A health and nutrition store stocks a multivitamin with an annual demand of 1,000 bottles has C0=$26.50 and Ch=$7. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with =25 and =5.
(a) What is the recommended order quantity? (Round your answer to the nearest integer.)
(b) What are the reorder point and safety stock if the store desires at most a 4% probability of stock-out on any given order cycle? (Round your answers to the nearest integer.)
reorder point
safety stock
(c) If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? (Round your answer to four decimal places.)
How many times would you expect a stock-out during the year if this reorder point were used? (Round your answer to the nearest integer.)
 You may need to use the appropriate technology to answer this

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!