Dayton Electronics demands a part at a daily rate of 72 units. The lead time for replenishment is 5 days for this item. The standard deviation of demand during the lead time is 9. Dayton Electronics prides itself on having a high level of customer service and strives to achieve a service level of 95%. How much safety stock should Dayton Electronics hold for this item? What will be the annualized cost of this safety stock if the opportunity cost of capital for Dayton Electronics is 10% and the item costs $150? Click the icon to view the table for the z-values for the given probabilities. The safety stock isu units. (Enter your response rounded up to the next whole number)

Dayton Electronics demands a part at a daily rate of 72 units. The lead time for replenishment is 5 days for this item. The standard deviation of demand during the lead time is 9. Dayton Electronics prides itself on having a high level of customer service and strives to achieve a service level of 95%. How much safety stock should Dayton Electronics hold for this item? What will be the annualized cost of this safety stock if the opportunity cost of capital for Dayton Electronics is 10% and the item costs $150? Click the icon to view the table for the z-values for the given probabilities. The safety stock isu units. (Enter your response rounded up to the next whole number)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 8MC

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