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3. You are working as a supply chain specialist for a distributor of Canadian Crown Royal. Its average weekly demand is 80,000 liters with a
3. You are working as a supply chain specialist for a distributor of Canadian Crown Royal. Its average weekly demand is 80,000 liters with a standard deviation of 3,000 liters. Your cost for Crown Royal is $15 per liter. Your boss follows a policy of ordering on the 1st,16th of every month. That is, a fixed interval of 15 days. The replenishment lead time is 8 days. Inventory carrying cost is 10% of the cost of goods and replenishment cost is $500 per replenishment. Suppose the stock at hand on a 1st of a month is 6,000 liters. You maintain a customer service level (CSL) of 92 percent. Compute the following: a. The risky period during which stockout can occur. (2) b. Average demand during the risky period. (3) c. Safety stock (10) d. Maximum Inventory (10) e. Minimum inventory on an average (5) f. Annual Inventory Carrying cost. (10) g. Annual replenishment cost
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