A company sells 3-ring binders by the box (5 binders in each box) through its membership club stores. Daily demand for these binders is normally distributed with a mean of 50 boxes and a standard deviation of 5 boxes. When the company orders more binders, the ordering cost is $42 per order which takes, on average, 7 days to arrive with a standard deviation of 2 days. Each box of binders costs $7.20 and the holding rate is 24% per year. Assume the store is open 360 days a year.What is the EOQ (Q*)? What is the mean and standard deviation of demand during the lead time?The company wants the probability of stocking out to be no more than 5%, what is the safety factor (the z-value)?The company wants the probability of stocking out to be no more than 5%, what is the reorder point and how much safety stock should the company maintain?
A company sells 3-ring binders by the box (5 binders in each box) through its membership club stores. Daily demand for these binders is
What is the EOQ (Q*)?
What is the mean and standard deviation of demand during the lead time?
The company wants the probability of stocking out to be no more than 5%, what is the safety factor (the z-value)?
The company wants the probability of stocking out to be no more than 5%, what is the reorder point and how much safety stock should the company maintain?
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