Mathematics, 12.12.2019 05:31 confi3353
Autility company has weekly demand for a certain type of transformer that is normally distributed with a mean of 150 and a standard deviation of 75. holding costs are 40% and inventory must be held corresponding to a cycle service level of 95%. the utility company is trying to choose between two suppliers, reliable components and value electric, who offer the following terms. reliable sells the transformer for $5,000 with a minimum order of 150, and a lead time of 1 week with a standard deviation of 0.1 week. value sells the transformer for $4000 in batches of 1500 with a lead time of 5 weeks and standard deviation of 4 weeks. in both cases, the lead times are normally distributed. what are the annual costs of using each of the suppliers and which supplier should be chosen?
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