15.5 Demand
avg/week 100
sd/week 50
Holding cost 25%
CSL 0.95
Supplier 1: Reliable Supplier 2: Value
Cost/unit $5,000 Cost/unit $4,800
min batch 100 min batch 1000
Lead time (wks) 1 Lead time (wks) 5
SD of LT (wks) 0.1 SD of LT (wks) 4
Material cost $26,000,000 Material cost $24,960,000
Avg cycle inv 50 Avg cycle inv 500
Cycle inv cost $62,500 Cycle inv cost $600,000
SD (dem over LT) 50.99 SD (dem over LT) 415.33
Safety inv (ss )83.87 Safety inv 683.16
Safety inv cost 104,839$ Safety inv cost 819,791$
Total cost 26,167,339$ Total cost 26,379,791$