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What would be the annual total cost

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Question: What would be the annual total cost (i.e., holding and ordering costs) if the order quantity was set at 100 units?This same retailer would like to further modify their inventory management strategy for digital cameras to account for demand uncertainty and the fact that the distributor's lead-time is 1 week. The retailer estimates that weekly demand can be estimated by a normal distribution with a mean of 10 units/week and a standard deviation of 2 units/week. He would like to use a continuous review policy to control when inventory should be ordered. What safety stock level do you recommend the retailer set for this policy assuming they want to maintain an in-stock target of 0.9?

Reference no: EM133604210

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