QUESTION 4 Harry's is a famous souvenir shop that targets tourists. Harry purchases souvenirs for $5 each. It is estimated that the cost of order processing is $100 per order. Harry uses a 19% annual interest rate to compute holding cost.The six-month demand for the souvenirs sale follows a normal distribution with mean 580 and standard deviation 36. Lead time is 6 months. What is the reorder size (R) to ensure a type 1 service level of 95%.

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 4
Harry's is a famous souvenir shop that targets tourists. Harry purchases souvenirs for $5 each. It is estimated that the cost of order processing is $100 per order. Harry uses a 19% annual
interest rate to compute holding cost.The six-month demand for the souvenirs sale follows a normal distribution with mean 580 and standard deviation 36. Lead time is 6 months. What is the
reorder size (R) to ensure a type 1 service level of 95%.
Transcribed Image Text:QUESTION 4 Harry's is a famous souvenir shop that targets tourists. Harry purchases souvenirs for $5 each. It is estimated that the cost of order processing is $100 per order. Harry uses a 19% annual interest rate to compute holding cost.The six-month demand for the souvenirs sale follows a normal distribution with mean 580 and standard deviation 36. Lead time is 6 months. What is the reorder size (R) to ensure a type 1 service level of 95%.
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