What is floyds reorder point if the firm wants to restrict

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For Floyd Distributors in Problem 29, we were given Q* = 25, D = 200, Ch = $5, and a normal lead-time demand distribution with µ = 12 and σ = 2.5.

a. What is Floyd's reorder point if the firm is willing to tolerate two stockouts during the year?

b. What is Floyd's reorder point if the firm wants to restrict the probability of a stockout on any one cycle to at most 1%?

c. What are the safety stock levels and the annual safety stock costs for the reorder points found in parts (a) and (b)?

Reference no: EM13918734

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