Essay
In the previous problem,the manufacturer performs additional market research.Based on this research,they determine that they can increase the price to $150 and are able to reduce the standard deviation of the forecast to σ = 30.At the same time,they have made an arrangement with an outlet store that will purchase unsold equipment for $60 each.How will these changes affect the cost of overstocking,cost of understocking,optimal cycle service level and optimal order size?
Correct Answer:
Verified
Co = c - s
= $75 - $50
= $25
Cu = p - c
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Correct Answer:
Verified
= $75 - $50
= $25
Cu = p - c
...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
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