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NorrisBBQ NorrisBBQ
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6 years ago
A product has a reorder point of 260 units, and is ordered ten times a year on average. The following table shows the historical distribution of demand values observed during lead time.
 
  Demand Probability
  240 .1
  250 .2
  260 .4
  270 .2
  280 .
 
  1
 
  Currently, stockouts are valued at 5 per unit per occurrence, while inventory carrying costs are 2 per unit per year. Should the firm add safety stock? If so, how much safety stock should be added?
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Ha d.Ha d.
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6 years ago
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NorrisBBQ Author
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6 years ago
Thanks
vanna2014
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Yesterday
Helped a lot
Marctheshark
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2 hours ago
Good timing, thanks!
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