Problem 3. One of the largest selling items in J.C. Ward's Department Store is a new model of refrig- erator that is hig

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Problem 3 One Of The Largest Selling Items In J C Ward S Department Store Is A New Model Of Refrig Erator That Is Hig 1 (42.69 KiB) Viewed 39 times

Problem 3. One of the largest selling items in J.C. Ward's Department Store is a new model of refrig- erator that is highly energy-efficient. About 80 of these refrigerators are being sold per month. It takes about a week for the store to obtain more refrigerators from a wholesaler. The demand during this time has a uniform distribution between 10 and 30. The adminis- trative cost of placing each order is $100. For each refrigerator, the holding cost per month is $15 and the shortage cost per month is estimated to be $3. The store's inventory manager has decided to use the stochastic continuous-review model, with a service level (measure 1) of 0.8, to determine an (R,Q) policy. (a) Determine R and Q. (b) What will be the average number of stockouts per year with this inventory policy?