Consider three items with the following characteristics: Demand Di vi Qi Li Item i (Units/Year) ($/Units) (Units)

Consider three items with the following characteristics:

Demand Di vi Qi σLi Item i (Units/Year) ($/Units) (Units) (Units)

1 1,000 1.00 200 100 2 500 0.80 200 100 3 100 2.00 100 30 Suppose that a TSS of $120 is to be allocated among the three items. Consider the following service measures (shortage-costing methods):

1. Same P1 for the 3 items 2. Same P2 for the 3 items 3. Same B1 for the 3 items 4. Same B2 for the 3 items 5. Same TBS for the 3 items 6. Minimization of total expected stockout occasions per year 7. Minimization of total expected value short occasions per year 8. Equal time supply SSs For each, determine

a. How the $120 is allocated among the three items

b. ETSOPY

c. ETVSPY Note: Assume that forecast errors are normally distributed, that the same r value is applicable to all three items, and that negative safety factors are not permitted.