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A large supplier of the electronic constituents has decided to control the inventory of the certain item by the periodic review, order up to R policy. The mean demand rate for this item is the 500 units for each year. The lead time? Is nearly stable at three months. The demand in time ? + T can be represented by the normal distribution with mean 500 (? + T) and variance 800(? + T). The cost of each unit is $10, the inventory carrying cost rate is 0.10, cost of making the review and placing an order is $15, and cost of backorder is approximated to be $30. Find out the optimal quantity and period for this problem.

Operation Management, Management Studies

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