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(Solved): A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distribute ...



A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed, with a mean of 1,000 units and a standard deviation of 200 units. It costs $6 to hold one unit for one year. If the firm wants to meet 90% of all demand on time, what will be the annual cost of holding safety stock? (Assume that each order costs $50.)



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