Question
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 a36 day year. a. Calculate the optimum order quantity & the optimum safety Stock.
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