Unformatted text preview: • Selling price is $100/unit. • Any units unsold at the end of the winter are marked down to $51 which assures that they will be sold. • Forecasted demand for the coming winter season: Hundreds of units, k 3 4 5 6 7 8 Prob(k) 0.1 0.1 0.4 0.2 0.1 0.1 (a) To maximize profits, how many units should the buyer acquire? (b) What is the expected profit? 3 . .. Inventory control system parameters are to be established using the following data: K = $200 h = $2/unitweek L = 3 weeks R = 4 weeks E(D) = 550/week σ (D) = 300 (weekly demand is Normally distributed) Demand not met directly from inventory is lost to a competitor. (a) Given that SLM1 = 0.99, determine an optimal safety stock and orderuptolevel for the control system. (b) Assume R = 0 and the corresponding reorder point is 4000. Determine an order quantity such that SLM1 = Prob{system has insufficient inventory in any given cycle}. Note: SLM1 not necessarily .99!!...
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This note was uploaded on 05/05/2008 for the course IE 221 taught by Professor Georgewilson during the Spring '08 term at Lehigh University .
 Spring '08
 GeorgeWilson
 Operations Research

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