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Mr. Fantastic's garage purchases mufflers for his cars using a periodic review system. His annual demand is 3000 mufflers, standard deviation of daily demand
Mr. Fantastic's garage purchases mufflers for his cars using a periodic review system. His annual demand is 3000 mufflers, standard deviation of daily demand is 6 mufflers, and one muffler costs $25 to purchase. His inventory carrying cost for mufflers is very high at 35% of the muffler's value. Mr. Fantastic reviews his inventory every 15 days, and it takes 2 more days for him to receive his items after ordering them. It costs $100 per every order he sends out. He wants to maintain a service level of 75% and if he typically keeps the garage open for 250 days, what optimal inventory level would you recommend Mr. Fantastic for his upcoming order? (Assume that there is 25 on order items, 5 on hand items, and zero back orders right now) 191 215 276 164
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