Thomas Cain is the purchasing manager for multiple store Mattress firm. The demand for the most popular mattress is 6000 units per year. The cost of each mattress is $120, and inventory carrying cost is $15 per unit per year. The average ordering cost is $50 and it takes 5 days for an order to arrive. The stores operate 250 days a year. Find
a. The optimal order quantity.
b- The number of orders per year.
c- The number of working days between orders.
d- The total cost of inventory including the cost of 6000 units.
e- Find the basic reorder point (Expected demand during lead time).
f- Find reorder point if demand during lead time has normal distribution with standard deviation of 4 and we desire only 1% chance of stock out. (Hint ROP = expected demand during lead time + Safety stock).