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Authentic Thai rattan chairs are delivered to Gary Schwartz's chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without safety
Authentic Thai rattan chairs are delivered to Gary Schwartz's chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without safety stock, is chairs. Carrying cost is $ per unit per year, and the cost of a stockout is $ per chair per year. Given the following demand probabilities during the lead time, how much safety stock should be carried?
Demand During Lead Time
Probability
Part
The optimal quantity of safety stock which minimizes expected total cost is
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