A product is ordered once each year, and the reorder point without safety stock (dL) is 100 units. Inventory carrying cost is $10 per unit per year, and the cost of a stockout is $50 per year. Given the following demand probabilities during the reorder period, how much safety stock should be carried? DEMAND DURING REORDER PERIOD 0 .1 50 .2 PROBABILITY A 100 .4 ROP 150 .2 200 .1
A product is ordered once each year, and the reorder point without safety stock (dL) is 100 units. Inventory carrying cost is $10 per unit per year, and the cost of a stockout is $50 per year. Given the following demand probabilities during the reorder period, how much safety stock should be carried? DEMAND DURING REORDER PERIOD 0 .1 50 .2 PROBABILITY A 100 .4 ROP 150 .2 200 .1
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
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Transcribed Image Text:A product is ordered once each year, and the reorder point without safety stock
(dL) is 100 units. Inventory carrying cost is $10 per unit per year, and the cost of a
stockout is $50 per year. Given the following demand probabilities during the
reorder period, how much safety stock should be carried?
DEMAND DURING REORDER PERIOD
PROBABILITY
0.
.1
50
.2
A 100
150 .2
.4
ROP
200
.1
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