The optimal quantity of safety stock

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Reference no: EM131124450

Authentic Thai rattan chairs are delivered to Gary Schwartz's chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without stock, is 200 chairs. Carrying cost is $30 per unit per year, and cost of a stockout is $60 per chair per year. Given the demand probabilities during the lead time, how much safety should be carried?

0                   0.2

100              0.2

200              0.2

300              0.2

400            0.2

The optimal quantity of safety stock which minimizes expected total cost is ___ units? (Enter response as a whole number.)

Reference no: EM131124450

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