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Let's assume that the annual demand for Nacho chips is 14,560 units. The daily demand is 40 units with a standard deviation of 5 units.
Let's assume that the annual demand for Nacho chips is 14,560 units. The daily demand is 40 units with a standard deviation of 5 units. The cost to place order is $32,00, and the time from ordering to receipt is two days. The annual inventory holding cost is $0.40 per unit. Find the reorder point necessary to provide a 98 percent service probability (i.e., probability of a stock out). Also, if the operations manager wants to reduce the safety stock of the nacho chips by 50%, what will the new service probability be? To get a full credit, you need to provide specific explanation regarding your analysis. (3 pts) Given the case in class (i.e., Airline Food Temperature), please answer the following
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