Solve the below problem:
Q: Tobacco is shipped from North Carolina to a cigarette manufacturer in Cambodia once a year. the reorder point, without safety stock, is 200 kilos. the carrying cost is $15 per kilo per year and the cost of a stock out is $65 per kilo per year Given the following demand probabilities during the lead time how much safety stock should be carried?
|
Demand During (mod lime (Kilos)
|
Probability
|
|
0
|
.1
|
|
100
|
.1
|
|
200
|
.2
|
|
300
|
.4
|
|
400
|
.2
|
The optimal quantity of safety stock which minimizes expected total cost Is kilos