Business, 04.12.2019 05:31, emmmmmmaaaa

You are making the inventory decisions for an international company that sells bathing suits. the product has a forecasted daily demand with mean 100 and standard deviation 36. the selling season only lasts 6 months since bathing suits are a seasonal item. you are procuring the product from your factory in china (out-sourcing) and as a result the lead time is so long (6 months) that you can only place only one order per selling season (6 months before the season begins). you want to ensure a service level of 97.5% and the cost of capital of the firm is 20% (that is, the firm faces an annual interest rate of 20%). shipping cost is $4,500 while procurement cost (purchase cost) per item is $5.

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You are making the inventory decisions for an international company that sells bathing suits. the pr...