Annual demand is 9600, cost per order is $65/order, annual holding (carrying) cost per unit is $3/unit, the company works 300 days a year and lead time demand (m) is 6 working days. If the company allows shortages 2 times a year, the probability that lead time demand is allowed to be higher than the reorder point (probability of shortages) is approximately: O a. 74.33% O b. 15.33% O c. 25.67% d. 86.67% e. 13.33%

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Annual demand is 9600, cost per order is $65/order, annual
holding (carrying) cost per unit is $3/unit, the company works
300 days a year and lead time demand (m) is 6 working days.
If the company allows shortages 2 times a year, the
probability that lead time demand is allowed to be higher
than the reorder point (probability of shortages) is
approximately:
O a. 74.33%
O b. 15.33%
O c. 25.67%
d. 86.67%
e. 13.33%
Transcribed Image Text:Annual demand is 9600, cost per order is $65/order, annual holding (carrying) cost per unit is $3/unit, the company works 300 days a year and lead time demand (m) is 6 working days. If the company allows shortages 2 times a year, the probability that lead time demand is allowed to be higher than the reorder point (probability of shortages) is approximately: O a. 74.33% O b. 15.33% O c. 25.67% d. 86.67% e. 13.33%
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