Mathematics, 11.04.2020 00:00 ciel8809
Furnco sells secretarial chairs. Annual demand is normally distributed, with mean of 1,040 chairs and standard deviation of 50.99 chairs. Furnco orders its chairs from its flagship store. It costs $100 to place an order, and the lead time is two weeks. Furnco estimates that each stockout causes a loss of $50 in future goodwill. Furnco pays $60 for each chair and sells it for $100. The annual cost of holding a chair in inventory is 30% of its purchase cost.
determine the reorder point that yields 80%, 90%, 95%, and 99% values of SLM. What reorder point would yield an average of two stockouts per year?
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