Weekly demand for motors is normally distributed with a mean of 1500 and a standard deviation of (1009). Motors are currently assembled in Taiwan and delivered at a cost of (1927)$/motor. The supplier takes four weeks to supply an order. A domestic manufacturer has offered to supply motors with a lead time of 1.5 weeks on average at a cost of (2159)$/motor. The motor manufacturer is targeting a CSL of 99.5 percent and monitors its inventory continuously. The manufacturer incurs a holding cost of 30%. Should the manufacturer accept the local supplier's offer?

Weekly demand for motors is normally distributed with a mean of 1500 and a standard deviation of (1009). Motors are currently assembled in Taiwan and delivered at a cost of (1927)$/motor. The supplier takes four weeks to supply an order. A domestic manufacturer has offered to supply motors with a lead time of 1.5 weeks on average at a cost of (2159)$/motor. The motor manufacturer is targeting a CSL of 99.5 percent and monitors its inventory continuously. The manufacturer incurs a holding cost of 30%. Should the manufacturer accept the local supplier's offer?

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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