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Marigold Corp. sells 2,750 dim-night bulbs per year, and places orders for 670 of these bulbs at a time. Assuming no safety stocks, Marigold estimates a 60% chance of no shortages in each cycle and the probability of shortages of 5, 10, and 15 units are 0.15, 0.15, and 0.10 respectively. The carrying cost per unit per year is calculated as $15 and the stockout cost is estimated at $12. Total cost is calculated from carrying cost and stockout cost of the bulbs of each cycle. Estimate the level of safety stock Marigold should use for this product, considering safety stock of 0, 5, 10, and 15 units respectiv

Marigold Corp. sells 2,750 dim-night bulbs per year, and places orders for 670 of these bulbs at a time. Assuming no safety stocks, Marigold estimates a 60% chance of no shortages in each cycle and the probability of shortages of 5, 10, and 15 units are 0.15, 0.15, and 0.10 respectively. The carrying cost per unit per year is calculated as $15 and the stockout cost is estimated at $12. Total cost is calculated from carrying cost and stockout cost of the bulbs of each cycle. Estimate the level of safety stock Marigold should use for this product, considering safety stock of 0, 5, 10, and 15 units respectiv

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Marigold Corp. sells 2,750 dim-night bulbs per year, and places orders for 670 of these
bulbs at a time. Assuming no safety stocks, Marigold estimates a 60% chance of no
shortages in each cycle and the probability of shortages of 5, 10, and 15 units are 0.15, 0.15,
and 0.10 respectively. The carrying cost per unit per year is calculated as $15 and the
stockout cost is estimated at $12. Total cost is calculated from carrying cost and stockout
cost of the bulbs of each cycle. Estimate the level of safety stock Marigold should use for
this product, considering safety stock of 0, 5, 10, and 15 units respectively.

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