A product with an annual demand of 1000 units has Co = $25.50 and Ch = $8. The demand exhibits some variability such that the le
ad-time demand follows a normal probability distribution with μ=25 and σ=5. a.What is the recommended order quantity? b. What are the recorder point and safety stock if the firm desires at most a 2% probability of stockout on any given order cycle? c. If a manager sets the reorder point at 30, what is the probability of a stockout on any given order cycle? How many times would you expect a stockout during the year if the reorder point were used?
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