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Question 7 (10 points) An organization which sells weight training sets, has an ordering cost of 40$ per set. The canying cost is 5$ per

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Question 7 (10 points) An organization which sells weight training sets, has an ordering cost of 40$ per set. The canying cost is 5$ per set per year. To meet demand the organization makes orders 7 times a year. The stockout cost (lost sale opportunity) is estimated to be 50 dollars per set. The reorder point is 60 sets (when inventory on-shelf reaches 60 units an order is placed) What level of safety stock should be maintained if the organization experienced the following probability distribution for demand during the lead time: Number of units in demand probability 40 0.1 50 0.2 60 0.2 70 0.2 80 0.2 90 0.1 Hint: compare the holding and stockout costs with different safety stock policies. OBI *]

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