What is safety tock level be recommended

Reference no: EM132644533

Problem 1: The company is considering a safety stock level of 40 units in which the probability of having stockouts for the year is 20%, and a total annual stockout cost to be incurred at P50. Carrying cost per unit is P1.25. Assume that the company wants to establish a safety stock level that total stockout costs and carrying costs do not exceed P110, is the given safety tock level be recommended?

Reference no: EM132644533

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