A manufacturer uses a purchase part whose demand over any time period of length

Question

A manufacturer uses a purchase part whose demand over any time period of length t (in years) can assume to be normally distributed with mean 200t and variance 400t. The part cost $20 each. The lead-time is 4 weeks. The annual carrying cost rate is 0.2 $/$/year. All shortages are backlogged and the shortage cost is proportional to the number units short, where the backlogged cost is $16 per unit. The setup cost is $100. A reorder point (s,Q) policy is used. (Assuming 52 working weeks within a year). a) Find the optimal order quantity and the reorder point. b) Find the average total relevant cost (setup cost, inventory holding cost and shortage cost)

Explanation / Answer

since the above follows normal distribution convert them into the form z=(x-mean)/variance the cost per part is given and related data is also u need to use a statisitcal table to get the values total cost will be fixed cost+variable cost variable cost can be determined from the mean and variance

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.