chap. 10.q. 5

MER A product with an annual demand of 1,000 units has Co - $24.50 and C - $7. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with -25 and - 5. (a) What is the recommended order quantity? (Round your answer to the nearest Integer.) (b) What are the reorder point and safety stock if the firm desires at most a 3% probability of stock-out on any given order cycle? [You may need to use the appropriate appendix table or technology to answer this question. Round your answers to the nearest Integer) reorder point safety stock (c) If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? (Round your answer to four decimal places) How many times would you expect a stock-out during the year if this reorder point were used? (Round your answer to the nearest intent)