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Inven HW4
Inven HW4
HOMEWORK 4
Question 1:
ABC Company imports sport cars and redistributes them in the Vietnam’s market. Monthly
demand for the cars is normally distributed, with expected demand during lead time is 10 units,
standard deviation is 4 units and one-month lead time. Holding cost is $5. What is the backorder
cost to make sure that the service level is at least 90%?
Question 2:
Consider an item with D = 24 units per year; c = $125 per units; h = 0.2 * 125 =$25 per unit. The
lead time is one month. Fixed order cost is $15, and annual backorder cost is $150. Demand
during lead time is Poisson. Calculate:
a) The EOQ,
b) Reorder Point,
c) Average Inventory On-hand.
d) Consider we change the Policy (Q, r) to (3, 3), give your opinion regarding the new policy.