**Inventory Management and Safety Stock Calculation**Mr. Beautiful, a company specializing in weight training sets, incurs an ordering cost of $35 for the BB-1 set (Body Beautiful Number 1). The carrying cost for BB-1 is $15 per set annually. The company places large orders of BB-1 seven times a year to fulfill demand. Each BB-1 set has a stockout cost of $15. Based on historical data, Mr. Beautiful observed the following demand probabilities during the lead time for BB-1:| Demand During Lead Time | Probability ||-------------------------|-------------|| 100 | 0.1 || 110 | 0.2 || 120 | 0.2 || 130 | 0.2 || 140 | 0.2 || 150 | 0.1 |The reorder point for BB-1 is set at 120 sets. **Challenge:**Determine the level of safety stock required for BB-1.**Objective:**Calculate the optimal quantity of safety stock that minimizes expected total cost. Enter your response as a whole number in the space provided.

Given that stock out costs per set =$15, the carrying costs per set per year=$15, also given that…

Answered: The reorder point for BB-1 is 120sets.…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

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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 reorder point for BB-1 is 120sets. What level of safety stock should be maintained For BB-1? The optimal quantity of safety stock which minimizes expected total cost is enter your response as a whole number). sets