What is the optimum base stock level

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Reference no: EM13224953

A base stock system is used to control an item in a retail store. The demand for this item is Poisson distrubiton with a mean of 2 oders per week. The numbers of orders in a week is assumed to be exponential distribution with a mean of 1 week. The cost of this item is $60 and the inventory carrying cost rate is 0.2

The salesprice is $90 and the time dependent storage cost is $12. What is the optimum base stock level?

Reference no: EM13224953

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