For Floyd Distributors in Problem 29, we were given Q*= 25, D = 200, Ch = $5,

Question:

For Floyd Distributors in Problem 29, we were given Q*= 25, D = 200, Ch = $5, and a normal lead-time demand distribution with µ = 12 and σ = 2.5.

a. What is Floyd’s reorder point if the firm is willing to tolerate two stock-outs during the year?

b. What is Floyd’s reorder point if the firm wants to restrict the probability of a stock-out on any one cycle to at most 1%?

c. What are the safety stock levels and the annual safety stock costs for the reorder points found in parts (a) and (b)?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...