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2) (30 points) Customers demanding cameras sold in an electronics store arrive according to a Poisson process with rate 50 per week. The manager of
2) (30 points) Customers demanding cameras sold in an electronics store arrive according to a Poisson process with rate 50 per week. The manager of the store purchases the cameras from the main distributor for 100 TL and the fixed cost of placing an order is 500 TL. Moreover, the cost of holding each camera in store for one week is 5 TL. The manager wants to determine when and how much to order using an (R, Q) policy in order to satisfy the demand. a) (5 points) What is the order quantity if the lead time in deliveries is zero and an order is received immediately? What is the reorder level? b) (10 points) Suppose that there is a lead time of exacly one week in order deliveries. The manager want to make sure that 80% of the demand is satisfied. What is the reorder level and what is the safety stock? You are allowed to approximate the Poisson distribution by the normal distribution. c) (15 points) Suppose now that the demand is deterministic at rate 50 per week and there is a discount of 10 TL in the purchase price if the order quantity is over 200. The holding cost remains the same. What is the order quantity and the reorder level if the lead time is exactly 1 week
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