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

question 85

Essay

A product has a reorder point of 260 units,and is ordered ten times a year on average.The following table shows the historical distribution of demand values observed during lead time.
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?

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Definitions:

Global Brands

Brands that are recognized and available across many countries and cultures, often adapting their strategies to fit local markets while maintaining a consistent global image.

Multi-Cultural Collage

Multi-Cultural Collage refers to a diverse blend of cultural influences and elements that are combined in various aspects of society, including art, education, and businesses.

eBayization

A term used to describe the transformation of market environments to resemble an online auction or marketplace model, as exemplified by eBay.

Global Branding

The strategy of developing and managing a brand on a global scale, ensuring consistency in identity, values, and communication across different markets while accommodating local preferences.