Question
Samsung sells stereos and uses a continuous review system. The historical weekly demand for a smart speaker indicates that it has a normal distribution with
Samsung sells stereos and uses a continuous review system. The historical weekly demand for a smart speaker indicates that it has a normal distribution with mean 210 and standard deviation of 34. It takes about two weeks for an order to arrive, once an order is placed. The store pays $ 300 for a unit and it costs $ 120 to place the order. Samsung places a high value on customer satisfaction and considers goodwill to be crucial as they estimate that the loss of this costs $ 1.6 / speaker and has a penalty for late delivery of $ 1.3 / speaker-week. Stocks can be backordered and the annual cost of holding inventory is 16%. 93% fill rate required a) Find the reorder point ROP. Consider Q = 234 units. b) Find the safety inventory for the speakers. c) Find the expected annual cost of the continuous review policy. d) Find the expected number of missing speakers per year e) Find the cost of shortages per year
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started