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A company purchases a special spare part of the cars that are used at the rate of 800 per year. The cost of each part
A company purchases a special spare part of the cars that are used at the rate of 800 per year. The cost of each part is $25 and the cost of placing an order is $10. The inventory carrying cost is $2 per unit per year. The shortage cost is $5 per unit. Assume that the demand during lead time follows a uniform distribution over the range 0 to 200. If the company uses a continuous review policy, find optimal order quantity and reorder level for these parts
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