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Assignment:
IM Problem 2 Michigan State Figurine Inc (MSF) sells crystal fugurines to spartan fans. MSF buys the figurines from a manufacturer to $10 per unit. They send orders electronically to the manufacturer, costing $20 per order and they experience a lead time of 8 days for each order to arrive from the manufacturer. Their inventory carrying cost is 20%. The average daily demand of the figurines is 20 units per day with a standard deviation of 3 units. They are open for business 250 days a year.
a) Find the economic order quantity
b) Find the annual holding costs
c) Find the annual ordering costs
d) What is the reorder point? Assume a 95% service level.
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