Business, 28.02.2020 22:25 20068088

Jill, the office manager of a desktop publishing outfit, stocks replacement toner cartridges for laser printers. Demand for cartridges is approximated 30 per year and follows Poisson distribution. Cartridges cost $100 each and require 3 weeks to obtain from the vendor. Jill uses a (Q, r) approach to control stock levels. (Hint: you find the values on page 26 of LN 3 helpful in solving this problem) a. If Jill wants to restrict replenishment orders to tice per year on average, what batch size Q should she use? Using this batch size, what reorder point r should she use to ensure a service level (i. e., probability of having the cartridge in stock when needed) of at least 98 percent? b. If Jill is willing to increase the number of replenishment orders per year to six, how do Q and r change? Explain the difference in r. c. If the supplier of toner cartridge offers a quantity discount of $10 per cartridge for orders of 15 or more, how does this affect the relative attractiveness of ordering twice per year versus six

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