A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed with mean 1000 units and standard deviation 200 units. It costs $6 to hold one unit for one year. If the firm wants to meet 90% of all demand on time, what is the expected annual cost of holding safety stock? Assume that each order costs $50.

A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed with mean 1000 units and standard deviation 200 units. It costs $6 to hold one unit for one year. If the firm wants to meet 90% of all demand on time, what is the expected annual cost of holding safety stock? Assume that each order costs $50.

Name: A firm experiences demand with a mean of 100 units per day. Lead time
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Description: A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed with mean 1000 units and standard deviation 200 units. It costs $6 to hold one unit for one year. If the firm wants to meet 90% of all demand on time

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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