Question
Toms Tote Bags sells tote bags to a retail store. The inventory wants to be reduced by determining the optimal number of tote bags to
Toms Tote Bags sells tote bags to a retail store.
The inventory wants to be reduced by determining the optimal number of tote bags to order. The annual demand averages 13,780 boards and the order cost is $23.50 per order.
Holding cost is $6.00 per board per year.
The purchase cost of each board is $35.50.
The standard deviation of daily demand is 7 boards.
The standard deviation of lead time is 1.3 days.
Assume 260 working days in the year and an average lead-time of 5 days.
If a service level of 93% is desired during the reorder interval, what is the safety-stock? Round to whole number
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