An optometrist orders eyeglass frames at a cost of $40 per frame and sells each frame for $70. Annual holding cost is 20% of the optometrist’s cost of purchasing a frame. Each time frames are ordered, a cost of $200 is incurred. Because of lost goodwill, a cost of $50 is incurred each time a customer wants a frame that is not in stock. Frames are delivered one week after an order is placed. Annual demand for frames is N(1,040, 15.73).Assuming all shortages are backlogged, determine the order quantity and reorder point.Assuming all shortages result in lost sales, determine the order quantity and reorder point.To meet 95% of all orders from stock, what should be the reorder point?To have shortage occur during an average of two times per year, what should be the order point?</pstyle=”margin-bottom:>
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An optometrist orders eyeglass frames at a cost of $40 per frame and sells each frame for $70….