Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are the manager of the Manero Paint store, large paint outlet. One big demand item is color Number 107 (passion fire) latex paint in

You are the manager of the Manero Paint store, large paint outlet. One big demand item is color Number 107 (passion fire) latex paint in one-gallon containers. Manero paint sells 10000 containers of this paint every year. Demand is normally distributed with a standard deviation of 2000 units. Passion fire costs 7.50$ per container. The lead time from order to delivery is 10days with a standard deviation of 3 days. Holding costs are 16% per year and the fixed costs of placing an order are 80$. if Manero Paint stocks out of Passion Fire, It incurs 500$ in stockout costs. The replenishment rate is infinite. Use a3 60 day year. The calculation shows that The EOQ is 1155 containers. a. Calculate the optimum safety stock.

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

Multinational Financial Management

Authors: R M Srivastava

1st Edition

8174466703, 9788174466709

More Books

Students also viewed these Finance questions