What should be best policy in order to minimize total cost

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Reference no: EM132256337

Manhattan is analyzing the popsicle factory and the distribution to the main store in Zapopan. The factory can produce popsicles at a rate of 1,000 units per day. There is a cost of $300 each time that a new production starts. Also, the holding cost rate at the factory is the 5% of the cost of each popsicle per day. At the main store, each popsicle is sold in $5 and the holding cost rate is 8% of the cost of each popsicle per day. The cost of set an order to the factory is $250 and there is a lead time of 2 days since an order to the factory is set and the order is delivered to the store. If a client comes to the store and there is no popsicle, the store offers to the client a coupon of $2 discount so the client come back for the product later. The demand has a mean of 249.8 and a st.dev of 29.3. What should be the best policy in order to minimize the total cost?

Reference no: EM132256337

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