If long cost per unit 20 short cost per unit 30 and, Operation Management

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If long cost per unit 20 short cost per unit 30 and

If long cost per unit = $20, short cost per unit = $30, and historical DDLT data in units are:

DDLT

(Units) P (DDLT)

6 .1

7 .3

8 .5

9 .1

a. Use payoff table to determine the order point.

b. Use marginal analysis to determine the order point.

c. Compute the safety stock.

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Operation Management: If long cost per unit 20 short cost per unit 30 and

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Operation Management: If long cost per unit 20 short cost per unit 30 and

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