Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $45 for the BB-1 set (BB-1 stands for Body Beautiful Number 1). The carrying costfor BB-1 is $18 per set per year. To meet demand, Mr. Beautiful orders large quantities of BB-1 7 times a year. The stockout cost for BB-1 is estimated to be $40 perset. Over the past several years, Mr. Beautiful has observed the following demand during the lead time for BB-1:Demand During Lead TimeProbability100.1200.2300.2400.2500.2600.1The reorder point for BB-1 is 30 sets. What level of safety stock should be maintained for BB-1?The optimal quantity of safety stock which minimizes expected total cost issets (enter your response as a whole number).

In the question, given that stock out costs per set =40, the carrying costs per set per year=18,…

Answered: The reorder point for BB-1 is 30 sets.…

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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P inventory systems require continuous review of inventory levels. True False
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The weekly demand for a product is 770 units. The standard deviation of dailydemand is 10 units. The firm reviews its inventory every 28 days. Each order for the product arrives 9 days after placement. At the time of review, there are 10 units backorder. If 95 percent of all demand is to be satisfied from items in stock:a) How many units should be the safety stock?b) What’s the product’s inventory status?c) How many units should be ordered for this period?

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The reorder point for BB-1 is 30 sets. What level of safety stock should be maintained for BB-1? The optimal quantity of safety stock which minimizes expected total cost is | sets (enter your response as a whole number).