Homework Help is Here – Start Your Trial Now!
Math
Probability
Watch Entice sells high end watches. The annual demand for the company's product is 57,000 units. Ordering costs are $500 per order and carrying costs are $90 per unit, including $40 in the opportunit ost of holding inventory. It currently takes 2 weeks to supply an order to the store. The following tabl hows the probability distribution of various demand levels during the 2-week purchase-order lead tim otal Demand Probability of Demand 00 0.05 00 0.2 ,000 0.5 ,100 0.2 200 0.05

Watch Entice sells high end watches. The annual demand for the company's product is 57,000 units. Ordering costs are $500 per order and carrying costs are $90 per unit, including $40 in the opportunit ost of holding inventory. It currently takes 2 weeks to supply an order to the store. The following tabl hows the probability distribution of various demand levels during the 2-week purchase-order lead tim otal Demand Probability of Demand 00 0.05 00 0.2 ,000 0.5 ,100 0.2 200 0.05

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
See similar textbooks
icon
Related questions
Question
Watch Entice sells high end watches. The annual demand for the company's product is 57,000 units. Ordering costs are $500 per order and carrying costs are $90 per unit, including $40 in the opportunity cost of holding inventory. It currently takes 2 weeks to supply an order to the store. The following table shows the probability distribution of various demand levels during the 2-week purchase-order lead time: Total Demand Probability of Demand 800 0.05 900 0.2 1,000 0.5 1,100 0.2 1,200 0.05 Watch Entice does not hold any safety stock. If the company runs of stock, it has to rush order the computers at an additional cost of $10 per computer. What is the stock out cost? A. $21,600 B. $14,400 C. $7,200 D. $17,400
Transcribed Image Text:Watch Entice sells high end watches. The annual demand for the company's product is 57,000 units. Ordering costs are $500 per order and carrying costs are $90 per unit, including $40 in the opportunity cost of holding inventory. It currently takes 2 weeks to supply an order to the store. The following table shows the probability distribution of various demand levels during the 2-week purchase-order lead time: Total Demand Probability of Demand 800 0.05 900 0.2 1,000 0.5 1,100 0.2 1,200 0.05 Watch Entice does not hold any safety stock. If the company runs of stock, it has to rush order the computers at an additional cost of $10 per computer. What is the stock out cost? A. $21,600 B. $14,400 C. $7,200 D. $17,400
Expert Solution
steps

Step by step

Solved in 3 steps with 9 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
Probability
ISBN:
9780134753119
Author:
Sheldon Ross
Publisher:
PEARSON
A First Course in Probability
A First Course in Probability
Probability
ISBN:
9780321794772
Author:
Sheldon Ross
Publisher:
PEARSON
SEE MORE TEXTBOOKS