The supplier is reliable and maintains a constant lead time of 5 days. The cost

Question

The supplier is reliable and maintains a constant lead time of 5 days. The cost of placing an order is $10 and the cost of holding inventory is $0.50 per unit per year. There are no stock-out costs, and unfilled orders are filled as the order arrives. Assume sales occur over 360 days of the year.

Your goal here is to find the order quantity and reorder point to satisfy a 90 percent probability of not stocking out during the lead time.

a. to manage inventory, the company is using (select one)

b. Find the order quantity

c. find the reorder point

Explanation / Answer

www.csun.edu/~aa2035/CourseBase/Inventory/311_Session24.ppt?

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