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Xavier L is the purchasing agent for Central Valve Company, which sells industrial valves. One of Central's most popular valves has an annual demand of
Xavier L is the purchasing agent for Central Valve Company, which sells industrial valves. One of Central's most popular valves has an annual demand of units. The cost of each valve is $ and the inventory carrying cost is estimated at of the cost of each valve. Betsy has made a study of the costs involved in placing an order and has concluded that the average ordering cost is $ per order. Furthermore it takes about working days for an order to arrive from the supplier. Assume working days per year.Assume that the demand is random, with a daily average of units and a daily standard deviation of units. What is a reorder point with a service level?
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