Tower Bookstore orders books from one particular supplier every Tuesday. Once the order is placed, it takes

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Tower Bookstore orders books from one particular supplier every Tuesday. Once the order is placed, it takes 3 days for delivery, and an additional four days to get the books on the shelf. This season there is a book—The One Minute Parent—that is selling especially well.

The purchasing manager has gathered some data that she anticipates will be representative of demand for the next several months. It turns out that weekly demand has been 75 books on average, with a standard deviation of 5. The carrying charge is 18% per dollar invested in books, and the manager has determined that the charge per unit short is 30% of the sales price. Each copy costs Tower $5; and they apply a 50% markup to books of this type. Find the correct ordering policy.

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Inventory And Production Management In Supply Chains

ISBN: 9781032179322

4th Edition

Authors: Edward A Silver, David F Pyke, Douglas J Thomas

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