Large appliances needs to determine the order quantities

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A distributor of large appliances needs to determine the order quantities and reorder points for the various products it carries. The following data refer to a specific refrigerator in its product line: Cost to place an order $ 75 Holding cost 15 percent of product cost per year Cost of refrigerator $ 540 each Annual demand 720 refrigerators Standard deviation during lead time 36 refrigerators Lead time 11 days Consider an even daily demand and a 365-day year. a. What is the economic order quantity? (Round your answer to the nearest whole number.) Economic order quantity refrigerators b. If the distributor wants a 90 percent service probability, what reorder point, R, should be used? (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Reorder point refrigerators

Reference no: EM131150506

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