A Product Has a Reorder Point of 260 Units, and Is

question 140

Essay

A product has a reorder point of 260 units, and is ordered ten times a year. The following table shows the historical distribution of demand values observed during the reorder period.
Currently, stockouts are valued at $5 per unit per occurrence, while inventory carrying costs are $2 per unit per year. Should the firm add safety stock? If so, how much safety stock should be added?

---

Definitions:

Team Autonomy

The degree of freedom and independence a team has to make decisions, manage their work processes, and pursue their goals without direct oversight.

Knowledge

The facts, information, and skills acquired through experience or education; the theoretical or practical understanding of a subject.

Dark Side

Refers to the negative, often harmful aspects or consequences of a concept, situation, or technology that are not immediately apparent.

Hypocrisy Attribution Dynamic

A psychological phenomenon where individuals or groups are seen as hypocritical due to discrepancies between their statements and actions.