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Compute for the Optimum Order Size and Reorder point for PC UNLIMITED, a small reseller of Pentium Desktops. Compute for the safety stock in units.
Compute for the Optimum Order Size and Reorder point for PC UNLIMITED, a small reseller of Pentium Desktops. Compute for the safety stock in units. Estimate the total cost of the inventory policy (defined as total ordering costs plus total carrying costs plus total shortage costs) where PC Unlimited orders the optimum order size and at the reorder point computed above. The expected demand is 3,600 units per year. The cost of making an order is $20. The cost of carrying one unit in stock for one year is $1.20. The replenishment lead time is 1 month; and the mean usage during the lead time is 200 units with a standard deviation of 60 units, (assume that the demand data used to compute mean usage and standard deviation is monthly sales), and is normally distributed. The cost of shortage is $10 per unit out of stock
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