Building restocks printer ink cartridges for all employees

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Reference no: EM132132381

The business manager of an office building restocks printer ink cartridges for all employees. The demand for the cartridges is approximately 30 per month. Let the standard deviation be 5. Cartridges cost $100 each and they require 3 weeks to be delivered from the moment they are ordered. The cost to place an order is $45. The interest rate is 20% per month. a) What are the optimal values for a continuous review policy? Assume a stockout scenario where each stockout event costs $50. b) What are the optimal values for a continuous review policy? Assume a backorder scenario where the additional cost per unit of a backorder is $30. This includes the cost to expedite the shipment from a different supplier.

Reference no: EM132132381

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