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What is the expected annual cost

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Imagine that you have chosen Reliable as your supplier. Value Electric wants your business very much and offers you the choice of three mutually exclusive alternatives: reduce lead time by 1 week, reduce the minimum batch to 800, or reduce the standard deviation of lead time to 3 weeks. What are the expected annual costs of undertaking each of these options? What is the expected annual cost if all three could be put into effect? Would you change your decision to go with Reliable for any of these options?

Reference no: EM133400018

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