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Mathematics, 09.01.2021 22:50 nylaboo2222

You manage the shipping of a few important motors from your supplier to your company's factory. Demand for the motors is normally distributed with an average of 120000 motors per year and an annual standard deviation of 9600. Your company currently purchases motors each year from the supplier at a price of $127 per unit. The lead time for the delivery is 4 days on average, with a standard deviation of 3.5 days. You use Carrier ABC, which charges $6 per motor, with a minimum shipment of 2000 motors (i. e., Q=2000 motors.) Your company takes ownership of the shipment at the supplier’s dock and will have to incur any holding costs from that point on. Your company's holding charge is 14%, a cycle service level of 95% (given CSL=95%, use a k=1.64) and uses a 365 days per year for planning purposes. Your company includes the cost of transportation in the cost of the motors when calculating inventory costs.

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