Safety Firms Inc. sells photographic products using an (R,S) type of control system. SFI is considering investing in a scanner such that they can move from an (R,S) type to an (R,Q) inventory policy. It is expected that with a continuous review policy, the firm could reduce inventory management costs significantly: holding and shortage costs could be reduced. The unit cost of products is $10. Shipping and handling cost is $5. Demand for this year is estimated at 1,200 units. The inventory carrying cost is 0.12 $/$/year. Please use optimal (R,Q) policy, assuming a lead time, L=10 days, standard deviation of lead time = 35 units, to find the following:a) EOQ1. If a flat charge of $23.85 per stockout occasion (B1) is used please findb) Safety stock (ss)c) reorder pointd) Purchasing coste) Holding costf) Shortage cost and total costRepeat the process using the following options.2. B2 = 25% of unit cost will be charged per unit short3. B3 = 10% of unit cost will be charged per unit short per month
Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.
[order_calculator]