Tobacco is shipped from North Carolina to a cigarette manufacturer in Cambodia once a year. The reorder point, without safety stock, is 200 kilos. The carrying cost is $15 per kilo per year, and the cost of a stockout is $70 per kilo per year. Given the following demand probabilities during the lead time, how much safety stock should be carried? Demand During Lead Time (Kilos) Probability 0 0.1 100 0.1 200 0.2 300 0.4 400 0.2 Part 2 The optimal quantity of safety stock which minimizes expected total cost is enter your response here kilos (enter your response as a whole number).
Tobacco is shipped from North Carolina to a cigarette manufacturer in Cambodia once a year. The reorder point, without safety stock, is 200 kilos. The carrying cost is $15 per kilo per year, and the cost of a stockout is $70 per kilo per year. Given the following demand probabilities during the lead time, how much safety stock should be carried? Demand During Lead Time (Kilos) Probability 0 0.1 100 0.1 200 0.2 300 0.4 400 0.2 Part 2 The optimal quantity of safety stock which minimizes expected total cost is enter your response here kilos (enter your response as a whole number).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Question
Tobacco is shipped from North Carolina to a cigarette manufacturer in Cambodia once a year. The reorder point, without safety stock, is
200
kilos. The carrying cost is
$15
per kilo per year, and the cost of a stockout is
$70
per kilo per year. Given the following demand probabilities during the lead time, how much safety stock should be carried?|
Demand During Lead Time (Kilos)
|
Probability
|
|
|
0
|
|
0.1
|
|
100
|
|
0.1
|
|
200
|
|
0.2
|
|
300
|
|
0.4
|
|
400
|
|
0.2
|
Part 2
The optimal quantity of safety stock which minimizes expected total cost is
enter your response here
kilos (enter your response as a whole number).Expert Solution
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