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Home Depot procures a popular bathtub from its supplier at a cost of $ 6 0 4 per unit. The holding cost at Home Depot's
Home Depot procures a popular bathtub from its supplier at a cost of $ per unit. The holding cost at Home Depot's distribution center DC is of the purchase cost per unit per year. Weekly demand for the bathtub at the DC is normally distributed with a mean of units per week and a standard deviation of units per week. Home Depot would like to maintain a cycle service level for this product.
Suppose that Home Depot reviews its inventory continuously and that lead times for orders placed with the manufacturer are normally distributed with a mean of weeks and a standard deviation of weeks
Compute the annual holding cost of the safety stock in dollars required to meet the desired service level.
Rounding instructions:
Carry calculations to at least decimal places.
Round your answer to the nearest tenth of a dollar one decimal place
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