If demand is not uniform and constant, then stockout risks can be controlled by: A) increasing...
If demand is not uniform and constant, then stockout risks can be controlled by:
A) increasing the EOQ.
B) spreading annual demand over more frequent, but smaller, orders.
C) raising the selling price to reduce demand.
D) adding safety stock.
E) reducing the reorder point.
Homework Answers
The correct answer is option D.
If demand and lead time id variable, then there is possibility that actual demand may exceed expected demand. So, it is necessary to carry safety stock which is the additional inventory. This reduce the risk of stockout during lead time.
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If demand is not uniform and constant, then stockout risks can be controlled by:
A) increasing...
please read before solving thanks A products with an annual demand of 1000 units has EOQ (Economic Order Quantity)- 80. The demand during the lead time follows a normal probability distribution...
please read before solving
thanks
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A product with an annual demand of 1000 units has EOQ (Economic Order Quantity) = 80....
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please read before solving
thanks
A products with an annual demand of 1000 units has EOQ (Economic Order Quantity)- 80. The demand during the lead time follows a normal probability distribution with u- 25 and s-5 during the reorder period. a How much safety stock is required, if the firm desires at most a 2% probability of a 4. stockout on any given order cycle? b. If a manager sets the reorder point at 30, what is the probability of...
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