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A firm sells a product with an annual demand of A=6000. The holding cost is CH=$2 per unit per year and the ordering cost is
A firm sells a product with an annual demand of A=6000. The holding cost is CH=$2 per unit per year and the ordering cost is CP=$50 per order. The shortage cost is Cs=$10 per unit. Demand exhibits some variability and management has estimated that lead-time demand follows a normal distribution with a mean of 300 and standard deviation of 40. Suppose the order quantity is set to Q=500 units, what is the reorder point if management wants 97.8% service level (fill rate)? 311, 548, 421, 497, 289 Don't copy paste. Please provide correct answer.
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