A product with an annual demand of 1150 units has Co = $22.5 and Ch = $7. The de
ID: 337322 • Letter: A
Question
A product with an annual demand of 1150 units has Co = $22.5 and Ch = $7. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with µ = 29 and ? = 7. What is the recommended order quantity? If required, round your answer to two decimal places. Q* = What are the reorder point and safety stock if the firm desires at most a 3% probability of stock-out on any given order cycle? If required, round your answers to the nearest whole number. Record point = Safety stock = If a manager sets the reorder point at 34, what is the probability of a stock-out on any given order cycle? If required, round your answer to four decimal places. P(Stockout/cycle) = How many times would you expect a stock-out during the year if this reorder point were used? Number of Orders =
Explanation / Answer
A product with an annual demand of 1150 units has Co = $22.5 and Ch = $7. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with µ = 29 and ? = 7. What is the recommended order quantity? If required, round your answer to two decimal places. Q* = What are the reorder point and safety stock if the firm desires at most a 3% probability of stock-out on any given order cycle? If required, round your answers to the nearest whole number. Record point = Safety stock = If a manager sets the reorder point at 34, what is the probability of a stock-out on any given order cycle? If required, round your answer to four decimal places. P(Stockout/cycle) = How many times would you expect a stock-out during the year if this reorder point were used? Number of Orders =
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