Mother E, a business selling specialized helmet, has a carrying cost of P70 per unit per order. In order to satisfy the customers coming from various places, they order every 4 months. The stockout cost is P50 per unit per year. The following are the demand for specialized helmet Demand during lead time Probability 50 .1 60 .2 70 .2 80 .2 90 .1 The reorder point is 70 units. What level of safety stock should be maintained?

Mother E, a business selling specialized helmet, has a carrying cost of P70 per unit per order. In order to satisfy the customers coming from various places, they order every 4 months. The stockout cost is P50 per unit per year. The following are the demand for specialized helmet Demand during lead time Probability 50 .1 60 .2 70 .2 80 .2 90 .1 The reorder point is 70 units. What level of safety stock should be maintained?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question: What level of safety stock should be maintained?

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Mother E, a business selling specialized helmet, has a carrying cost of P70 per unit per
order. In order to satisfy the customers coming from various places, they order every 4
months. The stockout cost is P50 per unit per year. The following are the demand for
specialized helmet
Demand during lead time
Probability
50
.1
60
.2
70
.2
80
.2
90
.1
The reorder point is 70 units. What level of safety stock should be maintained?

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