27 Arms of Steel is an organization that sells weight training sets. The carrying cost for the...
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27 Arms of Steel is an organization that sells weight training sets. The carrying cost for the AS1 model is $5 per set per year. To meet demand, Arms of Steel orders large quantities of AS1 seven times a year. The stockout cost for AS1 is estimated to be
$50 per set. Over the past several years, Arms of Steel has observed the following demand during the lead time for AS1:
DEMAND DURING LEAD TIME PROBABILITY 40 0.1 50 0.2 60 0.2 70 0.2 80 0.2 90 0.1 The reorder point for AS1 is 60 units. What level of safety stock should be maintained for the AS1 model?
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Managerial Decision Modeling With Spreadsheets
ISBN: 9781292024196
3rd Edition
Authors: Barry Render
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