Use the following information for the next five questions. …
Use the following information for the next five questions. Clothes, Inc., has an average annual demand for medium polo shirts of 18,000 units. The cost of placing an order is $90 and the cost of carrying one unit in inventory for one year is $25. The stockout cost is $5 per unit. The purchase-order lead time is 6 days. We assume there are 360 days per year. Demand for every 6 days may vary with the following probability distribution: Demand for 6 days: 240 units 270 units 300 units 330 units 360 units Probability (sums to 1.00): 0.15 0.2 0.3 0.2 0.15
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