Determine the optimal ordering for electro

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Reference no: EM131421742

1. Determine the following:

a) The approximate number of orders per month.

b) The expected monthly setup cost.

c) The expected holding cost per month.

d) The expected shortage cost per month.

e) The probability of running out of stock during lead time.

2. Electro uses resin in its manufacturing process at the rate of 1000 gallons per month. It cost Electro $100 to place an order. The holding cost per gallon per month is $2, and the shortage cost per gallon is $10. Historical data show that the demand during lead time is uniform in the range (0,100) gallons. Determine the optimal ordering for Electro.

Reference no: EM131421742

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