Management of Ebony, a leading manufacturer of bath soap, is trying to control its inventory costs. The
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Management would like to evaluate the following production policy. If the current inventory is less than L = 30 units, they will produce 130 units in the next week. If the current inventory is greater than U = 80 units, they will produce 110 units in the next week. Otherwise, Ebony will continue at the previous week's production level.
Ebony currently has 60 units of inventory on hand. Last week's production level was 120.
Report the sample mean and standard deviation of the 52-week cost under each policy. Using the simulated results, is it possible to construct valid 95% confidence intervals for the average 52-week cost for each value of U? In any case, graph the average 52-week cost versus U. What is the best value of U for L = 30?
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Related Book For
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright
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