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5 The weekly demand is 1,000 units with a standard deviation of 250 units. The weight and cost per unit is 1.5lbs and $90 respectively.
5 The weekly demand is 1,000 units with a standard deviation of 250 units. The weight and cost per unit is 1.5lbs and $90 respectively. The holding cost rate is 15% and the TSL = 99% (z=2.33). There are no ordering costs and the production/prep lead time and standard deviation are 0. What inventory policy/transportation policy should they use from the following two options? Air/truck shipments. Transit time is 1 week with a std. dev of 0.5 weeks. Ordering quantity is 2 weeks' worth of demand. Existing rates: 500 lbs. = $142 cwt; 3,400 lbs. = 120cwt. Container Loads. Transit time is 4 weeks with a standard deviation of 1 weeks. Ordering quantity is a CL that can fit 7,000 units. The rate per CL is $3,400
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