What safety stock should be carried for a service level

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Reference no: EM131846110

Larry LaForge Products offers the following discount schedule for its 4-by-8-foot sheets of quality plywood. Home Sweet Home Company orders plywood from LaForge.

Order	Unit Cost
9 sheets or less	$18.00
10 to 50 sheets	$17.50
More than 50 sheets	$17.25

1. Home Sweet Home has an ordering cost of dollar 45. Carrying cost is 20 percentage, and annual demand is 100 sheets.What do you recommend?

2. Demand during lead time for one brand of TV is normally distributed with a mean of 36 TVs and a standard deviation of 15 TVs.

What safety stock should be carried for a 90% service level? What is the appropriate reorder point?

Reference no: EM131846110

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