Describe what reorder point should jill use and why

Reference no: EM13297262

Jill, the office manager of a desktop publishing company , stocks replacement toner cartridges for laser printers. demand for cartridges averages 50 per year and can be represented by the Poisson distribution. Cartridges cost $120 each and require 2 weeks to obtain from the vendor. Jill uses (Q,r) policy to control inventory of cartridges. You can assume that there are 50 working weeks in a year.

1) If Jill wants to restrict ordering of toner cartridges to 3 times per year, what should be the size,Q, of each order? Using this order quantity, if she wants to ensure a service level of at least 98%, what reorder point should she use?

2)If Jill is willing to increase the number of orders to 6 per year, how do Q and r change? Why does r change?

Reference no: EM13297262

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