2:36 all 72% INDIVIDUAL GRA… Question 3B CWD Office Supplies ells Printers, wh

2:36
all 72%
INDIVIDUAL GRA…
Question 3B
CWD Office Supplies ells Printers, which it orders from Kajama Ine in Japan. Because of
shipping and handling costs, each order must be for 5 printers. Because of the time it takes to
receive an order, the company places an order every time the present stock drops to 5 Printers. It
costs $50 to place an order. It costs the company $500 in lost sales when a customer asks for a
‘rinter and the warehouse is out of stock. It costs $100 to keep each Printer stored in the warehouse
If a customer cannot purchase a Printer when it is requested, the customer will not wait until one
comes in but will go to a competitor. The following probability distribution for demand for Printer
has been determined:
Demand per Week Probability
05
.10
20
35
20
05
05
‘he time required to receive an order once it is placed (lead time) has the following probability
distribution:
Time to Receive an Order (wk) Probability
60
.20
Time to Receive an Order (wk) Probability
.20