Decision Support Systems

2-2 Three trials for the company stock control system were calculated as shown in the table below. The holding cost, shortage cost and ordering costs have been estimated to be $220, $80 and $170. The company has a high competition therefore they need to keep their customer and attract more new customers. Strategy 1 200 Strategy 2 600 400 Strategy 3 400 300 200 0 2 1 20 12 5 Reorder Quantity Reorder Level Lead Time Number of days when stock out is occurred Number of days when holding is occurred Number of holding units Mean of closing cost Number of orders placed Number of Back orders 10 25 900 305 20 1000 18 1450 754 10 700 2500 1500 5 300 a. c. Based on the given information, answer the following questions: Which model has been used? b. Calculate the total cost under each trial Which of the following inventory strategy is the best? Explain your answer d. If the company has 600 units in the stock, production is 500 units and demand estimated to be 800 units, what will be the profit of the company in this day following strategy 1? (Price is $200 and production cost is $90). e. Based on D, if the demand is estimated to be 400, Reordered quantity is 200 units and the manager wants to reach profit of $33000, what should be the Reorder Level