Question
Demand for an item is 50 units a month. Unit cost is $25, re-order cost is $25, holding cost is 25% of value a year,
Demand for an item is 50 units a month. Unit cost is $25, re-order cost is $25, holding cost is 25% of value a year, shortage cost for back-orders is 40% of value a year. How often the item is out of stock? Choose the nearest answer.
a) 42% of the time
b) 38% of the time
c) 44% of the time
d) 40% of the time
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Get StartedRecommended Textbook for
OM operations management
Authors: David Alan Collier, James R. Evans
5th edition
1285451376, 978-1285451374
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