Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Home Depot procures a popular bathtub from its supplier at a cost of $ 2 7 5 per unit. The holding cost at Home Depot's

Home Depot procures a popular bathtub from its supplier at a cost of $275 per unit. The holding cost at Home Depot's distribution center (DC) is 26% of the purchase cost per unit per year. Weekly demand for the bathtub at the DC is normally distributed with a mean of 1,940 units per week and a standard deviation of 226 units per week. Home Depot would like to maintain a 93% 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 3 week(s) and a standard deviation of 2 week(s).
Compute the reorder point required to meet the desired service level.
Rounding instructions:
Carry calculations to at least 3 decimal places.
Round your answer to the nearest tenth of a dollar (one decimal place).

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

Successful Time Management

Authors: Patrick Forsyth

2nd Edition

0749460377, 978-0749460372

More Books

Students also viewed these General Management questions

Question

What is legalese? Give three examples of legalese.

Answered: 1 week ago

Question

How will I represent this new problem?

Answered: 1 week ago

Question

Discuss consumer-driven health plans.

Answered: 1 week ago