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An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
Edition 13ISBN: 978-1439043271An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
Edition 13ISBN: 978-1439043271 Exercise 5
A product with an annual demand of 1000 units has C O = $25.50 and C h = $8, 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?
b. What are the reorder point and safety stock if the firm desires at most a 2% probability of stockout on any given order cycle?
c. If a manager sets the reorder point at 30, what is the probability of a stockout on any given order cycle? How many times would you expect a stockout during the year if this reorder point were used?
a. What is the recommended order quantity?
b. What are the reorder point and safety stock if the firm desires at most a 2% probability of stockout on any given order cycle?
c. If a manager sets the reorder point at 30, what is the probability of a stockout on any given order cycle? How many times would you expect a stockout during the year if this reorder point were used?
Explanation
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a)Compute the Economic Order Quantity ( ...
An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
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