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In a blouse factory, there is an inventory holding cost of $ 1.50 per piece per day, a late sale cost of $ 3.00 per garment per day and an ordering cost of $ 500.00 There is a delivery time of 14 days per order and the exact demand during this time is not known, but it is known to be a random variable based on a normal distribution with a mean of 600 garments and a standard deviation of 60. Determine the order size, reorder point and safety stock so that there is no shortage during 95% of the delivery time.

In a blouse factory, there is an inventory holding cost of $ 1.50 per piece per day, a late sale cost of $ 3.00 per garment per day and an ordering cost of $ 500.00 There is a delivery time of 14 days per order and the exact demand during this time is not known, but it is known to be a random variable based on a normal distribution with a mean of 600 garments and a standard deviation of 60. Determine the order size, reorder point and safety stock so that there is no shortage during 95% of the delivery time.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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In a blouse factory, there is an inventory holding cost of $ 1.50 per piece per day, a late sale cost of $ 3.00 per garment per day and an ordering cost of $ 500.00 There is a delivery time of 14 days per order and the exact demand during this time is not known, but it is known to be a random variable based on a normal distribution with a mean of 600 garments and a standard deviation of 60. Determine the order size, reorder point and safety stock so that there is no shortage during 95% of the delivery time.
Transcribed Image Text:In a blouse factory, there is an inventory holding cost of $ 1.50 per piece per day, a late sale cost of $ 3.00 per garment per day and an ordering cost of $ 500.00 There is a delivery time of 14 days per order and the exact demand during this time is not known, but it is known to be a random variable based on a normal distribution with a mean of 600 garments and a standard deviation of 60. Determine the order size, reorder point and safety stock so that there is no shortage during 95% of the delivery time.
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