sample exam solution - 1 You work in the inventory planning department of a car manufacturing facility and a(Q,R inventory system is used to control the

sample exam solution - 1 You work in the inventory planning...

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1. You work in the inventory planning department of a car manufacturing facility, and a (Q,R) inventory system is used to control the replenishment of a commonly used engine. The department pays $1000 for each engine; in addition, a fixed fee of $2500 is charged for each shipment. Assume the annual holding rate is 2.4% and there are 48 weeks (4 weeks per month) in a year. The facility wants to maintain a 97.5% service level (z = 1.96). [stdev stands for standard deviation] a) Fill in the blanks in the above table. Show your work and state any assumptions you need to make. CasesDemandDistribution(monthly)Lead Time(weeks)ReorderPoint (units)SafetyStock(units)Cost ofSafetyStock($/month)TNormal withmean = 400stdev = 504???IConstant 400Uniformlydistributedover [3, 5]???
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