Weekly demand for Black Berry phones at Best Buy is normally distributed with a mean of 725

tandard deviation of 63.50. It costs Best Buy $1800 to place an order and Black Berry take

leeks to deliver an order. Best Buy incurs about $28 per year to hold one cell phone in its inver

a) Assuming that the average weekly demand can be taken as the stable deterministic

demand for these phones, what should be Best Buy's order size(assume a 52-week yea

b) Let us assume that Best Buy knows the inventory status of the Black Berry cell phone

times instantaneously, and the demand for the Blackberries is not deterministic as in p

but rather variable as discussed above. If Best Buy wants to maintain a 97.50% service

what should be the reorder point and the safety stock to achieve this desired service leve

c) Suppose that Best Buy is using the above policy according to the reorder point found

(b). Exactly one week after placing an order, the purchasing manager receives a ca

BlackBerry that the order will be delayed by one week due to some raw material problem

the talk, the Best Buy manager checks the inventory of the Black Berry phones and fin

only 405 phones have been sold since the order was placed. Assuming that Black

promise is valid, what is the probability that Best Buy will run out of Black Berry phones

the shipment arrives?

d) Now, let us assume that the Best Buy does not know the inventory status of the BlackBe

phones at all times, but rather reviews its inventory of these phones every fourth Frid

places an order according to the inventory level at that point. Suppose that Best Buy w

maintain a 97.50% service level. If it is now time to place an order and Best Buy has 4

phones on hand, what should be the order size?

e) Calculate the average annual inventory carrying cost for each of the policies discussed

(b) and part (d)

n) Calculate the inventory turnover ratio for each of