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The items have a standard cost of $81/unit. The monthly demand for items is normally distributed with a mean of 220 and a standard deviation of 40. The annual holding rate is 23% and the ordering cost is $200/order. it takes 3 weeks to receive the ordered items from the supplier. (4 weeks in a month, 12 months in a year, 48 weeks per year) You have been ordering a quantity of 237 units every time the inventory level fall under 195 units. What is the average cycle stock considering your policy?

The items have a standard cost of $81/unit. The monthly demand for items is normally distributed with a mean of 220 and a standard deviation of 40. The annual holding rate is 23% and the ordering cost is $200/order. it takes 3 weeks to receive the ordered items from the supplier. (4 weeks in a month, 12 months in a year, 48 weeks per year) You have been ordering a quantity of 237 units every time the inventory level fall under 195 units. What is the average cycle stock considering your policy?

Practical Management Science
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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The items have a standard cost of $81/unit. The monthly demand for items is normally distributed with a mean of 220 and a standard deviation of 40. The annual holding rate is 23% and the ordering cost is $200/order. it takes 3 weeks to receive the ordered items from the supplier. (4 weeks in a month, 12 months in a year, 48 weeks per year) You have been ordering a quantity of 237 units every time the inventory level fall under 195 units. What is the average cycle stock considering your policy?
Transcribed Image Text:The items have a standard cost of $81/unit. The monthly demand for items is normally distributed with a mean of 220 and a standard deviation of 40. The annual holding rate is 23% and the ordering cost is $200/order. it takes 3 weeks to receive the ordered items from the supplier. (4 weeks in a month, 12 months in a year, 48 weeks per year) You have been ordering a quantity of 237 units every time the inventory level fall under 195 units. What is the average cycle stock considering your policy?
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