Given the demand probabilities during the lead time

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Reference no: EM13778930

Authentic Thai rattan chairs are delivered to Gary Schwartz's chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without stock, is 200 chairs. Carrying cost is $40 per unit per year, and cost of a stock out is $70 per chair per year. Given the demand probabilities during the lead time, how much safety should be carried? DEMAND DURING LEAD TIME PROBABILITY

0 0.2

100 0.2

200 0.2

300 0.2

400 0.2

Reference no: EM13778930

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