Stockout cost per unit = $50
Alternative (ROP) 600 650 700 750 800 850 900 950 1000 1050 1100 EMV
600 $0 $12,500 $25,000 $37,500 $50,000 $62,500 $75,000 $87,500 $100,000 $112,500 $125,000 $32,875
650 $500 $0 $12,500 $25,000 $37,500 $50,000 $62,500 $75,000 $87,500 $100,000 $112,500 $23,625
Outcome (DDLT)
Problem 12-30
Carrying cost per unit per year = $10