Posted by **trai** on Friday, July 19, 2013 at 7:15pm.

A product with an annual demand of 1000 units has Co = $25.50 and Ch = $8. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with μ = 25 and σ = 5. 1. What is the recommended order quantity? 2. What are the reorder point and safety stock if the firm desires at most a 2% probability of stock-out on any given order cycle? 3. If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? How many times would you expect a stock-out during the year if this reorder point were used?

## Answer This Question

## Related Questions

- business - Daily demand for a product is 60 units with a standard deviation of ...
- Economics - Janice is producing a new product at marginal cost of £1, and by law...
- quantitative methods for business - A perishable diary product is ordered daily ...
- math - A sporting goods company has a distribution center that maintains ...
- Economics - Could you please check these thanks. Directions match each item with...
- Math - The demand for a commodity generally decreases as the price is raised. ...
- Calc - The demand for a commodity generally decreases as the price is raised. ...
- Economics - The table below shows annual demand (in 100,000 units per year) for ...
- Managerial Economics - This is some HW for a Managerial Econ class. I've got ...
- Quantitative Methods - The reorder point [see equation 14.6] is defined as the ...

More Related Questions