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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Since <em>N</em>/2 leaves a remainder, <em>N</em> must be odd and ends with 1, 3, 5, 7, or 9.
<em>N</em>/5 also leaves a remainder, so <em>N</em> is not divisible by 5, so it does not end in 5.
The only correct choice is then 9, since
1 = 0•5 + 1 and 1 = 0•2 + 1
3 = 0•5 + 3 and 3 = 1•2 + 1
7 = 1•5 + 2 and 7 = 3•2 + 1
9 = 1•5 + <u>4</u> and 9 = 4•2 + <u>1</u>
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Alternatively, the given information is equivalent to saying
Then you can use the Chinese remainder theorem to find <em>N</em>.