The Purchasing Manager for a Firm Is Trying to Determine

question 69

Essay

The purchasing manager for a firm is trying to determine what the safety stock should be for a particular product.She has developed the following table,which gives the distribution of demand during the lead-time and the probabilities: The carrying cost is $5 per unit per year,the ordering cost is $30 per order,and the stockout cost is $40 per unit.The reorder point is 60 units,and 6 orders are placed each year.What level of safety stock should be maintained?

---

Definitions:

Parenting Style

The manner in which parents raise their children, characterized by various dimensions such as warmth, discipline, communication, and expectations.

Authoritarian

A leadership or parenting style characterized by high demands and low responsiveness, where leaders or parents expect strict obedience without much explanatory feedback.

Ironclad

Refers to a type of warship in the 19th century that was covered in iron or steel armor plates.

Young Adulthood

A developmental stage typically ranging from late teens through twenties, characterized by exploration of personal and professional identities.