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The Suregrip Tire Company carries a certain type of tire with the following characteristics: Average annual sales =600 tires Ordering cost =$40 per order Carrying
The Suregrip Tire Company carries a certain type of tire with the following characteristics: Average annual sales =600 tires Ordering cost =$40 per order Carrying cost =25 percent per year Item cost =$50 per tire Lead time =4 days Standard deviation of daily demand =1 tire a. Calculate the EOQ. b. For a Q system of inventory control, calculate the safety stock required for service levels of 85,90,95, 97 , and 99 percent. c. Construct a plot of total inventory investment versus service level. d. What service level would you establish on the basis of the graph in part c ? Discuss
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