Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Winner Company stocks interior pre-hung doors purchased from a vendor from China. A typical door is purchased for $44.50 and sells for $58. It is
Winner Company stocks interior pre-hung doors purchased from a vendor from China. A typical door is purchased for $44.50 and sells for $58. It is estimated that the cost of order processing and delivery is $100 per order. The company uses an inventory carrying charge based on a 26% annual interest rate. Assume that if a door is demanded when stockout, then the demand is backordered, and the cost assessed for each backordered demand is $15. Suppose the supplier lead time for the doors is 6 weeks and that weekly demand (assuming 52 weeks per year) is normally distributed with mean 50 and standard deviation 15. 2.3 What is the optimal service level? Please answer with a number in [0,1]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started