Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 1,800 units per year. The cost of making an order is $10. The cost of carrying one unit in stock for one year is 60 cents. The replenishment lead time is 1 month; and the mean usage during the lead time is 100 units with a standard deviation of 30 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 $5 per unit out of stock

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cash Flows

Authors: Cyril Joseph

1st Edition

B0B84RHX2D, B0CPV8WDGT

More Books

Students also viewed these General Management questions