Mr.Beautiful, an organization that sells weight training?sets, has an ordering cost of $35 for theBB-1 set?(BB-1 stands for Body Beautiful Number1). The carrying cost for?BB-1 is $20per set per year. To meet?demand, Mr. Beautiful orders large quantities of?BB-1 4times a year. The stockout cost for?BB-1 is estimated to be $15per set. Over the past several?years, Mr. Beautiful has observed the following demand during the lead time for?BB-1:?
|Demand During Lead Time||Probability|
At Reorder point = 140 sets, Safety Stock = 0 sets
[.20 x 20] + [.20 x 40] + [.10 x 60] = 4 + 8 + 6 = 18 sets Carry Cost / Set / Year = $20.00 Stockout Cost / Set =...
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