TP1-2012 An automotive warehouse stocks a variety of parts t…
TP1-2012 An automotive warehouse stocks a variety of parts that are sold at neighborhood stores. One particular part, a popular brand of oil filter, is purchased by the warehouse for $1.50 each. The company uses an inventory carrying charge based on a 28 percent annual interest rate. It is estimated that the cost of order processing and receipt is $100 per order. The monthly demand for the filter follows a normal distribution with mean 280 and standard deviation 34.436. Order lead time is assumed to be five months. (Hint: convert monthly demand and standard deviation to lead time demand and standard deviation. Note: