Yearly demand of high performance tires at a retail store is 10,000 per year. The ordering cost is $400, the carrying cost is $100, and the lead time is 9 days. The retail store only closes 5 days in the year.
Find the optimal order size
Find the total annually inventory cost.
What is the reorder point?)
The current price of each tire is $150. The supplier offered a discount of $10 per tire if the retail store orders more than 300. What is the right decision? (justify your answer)
The company wants to ensure a 95% (z=1.645) service level.
What would be the cost of the safety inventory? (Assume ?d = 4)