Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Weiss's paint store uses a ( Q , R ) inventory system to control its stock levels. For a particularly popular white latex paint, historical

Weiss's paint store uses a (Q,R) inventory system to control its stock levels. For a particularly popular white latex paint, historical data show that the distribution of monthly demand is approximately normal, with mean 28 and standard deviation 8. Replenishment lead time for this paint is about 14 weeks. Each can of paint costs the store 56. Although excess demands are back-ordered, the store owner estimates that unfilled demands cost about $10 each in bookkeeping and loss-of-goodwill costs. Fixed costs of replenishment are $15 per order, and holding costs are based on a 30 percent annual rate of interest. a. What are the optimal lot sizes and reorder points for this brand of paint? b. What is the optimal safety stock for this paint?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Records And Information Management

Authors: William Saffady

4th Edition

1538152541, 978-1538152546

More Books

Students also viewed these General Management questions

Question

Distinguish the functions of mRNA, rRNA and tRNA.

Answered: 1 week ago

Question

Describe three productive topics of study in biological psychology.

Answered: 1 week ago