A. To provide a 98 percent service probability, what must the reorder point be?B. Suppose the production manager is told to reduce safety stock of this item by 125 units. If this is done, what will the new service probability be? Problem 20-22 (Algo)Annual demand for a product is 11,960 units; weekly demand is 230 units with a standard deviation of 50 units. The cost of placing anorder is $125, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.80 per unit.

To determine the reorder point and the new service probability, we require some extra…

Problem 20-22 (Algo) Annual demand for a product is 11,960 units; weekly demand is 230 units with a standard deviation of 50 units. The cost of placing an order is $125, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.80 per unit.

Problem 20-22 (Algo) Annual demand for a product is 11,960 units; weekly demand is 230 units with a standard deviation of 50 units. The cost of placing an order is $125, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.80 per unit.

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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