Mr beautiful an organization that sells weight training, Ask an Expert

Management Studies

Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $35 for the BB-1 set. (BB-1 stands for Body Beautiful Number 1.) The carrying cost for BB-1 is $19 per set per year. To meet demand, Mr. Beautiful orders large quantities of BB-1 Four times a year. The stockout cost for BB-1 is estimated to be $10 per set. Over the past several years, Mr. Beautiful has observed the following demand during the lead time for BB-1:

Demand during Lead time Probability

40 0.1

50 0.2

60 0.2

70 0.2

80 0.2

90 0.1

The reorder point for BB-1 is 60 sets. What level of safety stock should be maintained for BB-1?

A. The optimal quantity of safety stock which minimizes expected total cost is? sets ( enter your response as a whole number)

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91891984

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