Who is better positioned to regulate online transactions and handle irregularities or complaints – consumer advocacy groups or the government?
A product with an annual demand of 1150 units has Co = $22.5 and Ch = $7. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with µ = 29 and σ = 7.
A, What is the recommended order quantity? If required, round your answer to two decimal places.
B. What are the reorder point and safety stock if the firm desires at most a 3% probability of stock-out on any given order cycle? If required, round your answers to the nearest whole number.
Record point =
Safety stock =
C. If a manager sets the reorder point at 34, what is the probability of a stock-out on any given order cycle? If required, round your answer to four decimal places.
How many times would you expect a stock-out during the year if this reorder point were used?
Number of Orders =
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