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A product has an average weekly demand of 7 5 with an EOQ of 3 0 0 . The lead time is 2 weeks. The
A product has an average weekly demand of with an EOQ of The lead time is weeks. The inventory holding cost is $ per unit per week. The shortage cost is $ per unit over the order cycle. The demand forecast error follows
each week.
a pt What is the safety stock needed to mitigate the risk of high demand?
b pts It is proposed to reduce the lead time to week. This will cost $ per order cycle. Does the reduction in safety stock inventory cost per order cycle justify this cost?
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