SP25.4 Krishna Cables requires aluminium for its factory. The probability distributions of the daily usage rate and the lead time for procurement are given below. (These distributions are in- dependent.) Daily Usage Rate in Tonnes 2 3 4 Probability 0.2 0.6 0.2 Lead Time in Days 25 35 45 Probability Required: (a) What is the optimal level of safety stock? (b) What is the probability of stockout? 0.2 0.5 0.3 The stockout cost is estimated at 8,000 per tonne and the carrying cost is 2,000 per tonne per year.

SP25.4 Krishna Cables requires aluminium for its factory. The probability distributions of the daily usage rate and the lead time for procurement are given below. (These distributions are indevendent.) The stockout cost is estimated at 8,000 per tonne and the carrying cost is 2 , vuu Required: (a) What is the optimal level of safety stock? year. (b) What is the probability of stockout