Julia Walter owns and operates a large Mercedes dealership in Washington, D.C. In the past 36 months, her sales of this luxury car have ranged from a low of 6 new cars to a high of 12 new cars (see the table). Julia believes that sales will continue during the next 24 months at about the same pace and that delivery lead times will also continue to follow this pace (see the table). Julia currently orders 14 cars at a time and places a new order whenever the stock on hand reaches 12 autos. Beginning inventory is 14 cars. Julia establishes the following relevant costs: (i) The carrying cost per Mercedes is $600 per month, (ii) the cost of a lost sale averages $4,350, and (iii) the cost of placing an order is $570.

Frequency Probability Sales of New Cars per Month Delivery Time (Mos.) 6 3 1 0.44 7 4 2 0.33 8 6 3 0.16 9 12 4 0.07 10 9 11 1 12 1 Question 20 15 points Save Answer Consider the Car Dealership case study in lecture 9.1. Change the reorder point to 7 and assume there is no stockout cost. Replicate the simulation 1000 times. The average cost per month is closed to: O a. 1230 O b. 1330 O c. 1430 O d. 1530 A Click Submit to complete this assessment.