# of Probability Mapping ( 0- Demand per Probability Mapping ( 0-

Cuctomers 99 ) Customer 99 )
Order Q when inventory
0 0.1 0-9 1 0.1 0-9 Q
1 0.3 10-39 2 0.15 10-24 R
2 0.25 40-64 3 0.4 25-64 Costs:
3 0.2 65-84 4 0.35 65-99 Ordering
4 0.15 85-99 Holding
Backorder

Inventory Level
# of Demand per Total Ordering or
Week RN1 RN2 Beginning Ending
Customers Customer Demand Receiving

43 3

1 24 1 3 25 22 -

56 3

2 10 1 3 22 19 -

56 3
6 1
3 87 4 12 19 7 order 25
71 4
77 4
96 4
54 3
4 82 3 8 7 -1 -
8 1

26 3

5 30 1 3 -1 -4 received 25
Order Q when inventory <= R and there is no outstanding order
25
10

45
1
5

Costs

Ordering Holding Backorder Total

- 22 - 22

- 19 - 19

45 7 - 52

- - 5 5

- - 20 20
# of Cuctomers Probability Mapping ( 0- Demand per Probability Mapping ( 0-
99 ) Customer 99 )

0 0.1 0-9 1 0.1 0-9

1 0.3 10-39 2 0.15 10-24
2 0.25 40-64 3 0.4 25-64
3 0.2 65-84 4 0.35 65-99
4 0.15 85-99

Inventory Level
# of Demand per Total
Week RN1 RN2 Beginning Ending
Customers Customer Demand

1 43 2 45 3 7 25 18
87 4
2 93 4 8 1 12 18 6
26 3
73 4
77 4
3 66 3 96 4 9 6 -3
28 3
22 2
4 14 1 12 2 2 22 20
5 3 0 - - 0 20 20
Order Q when inventory <= R and there is no outstanding order
Q = 25 R = 10

Costs:
Ordering = $45 per order
Holding = $1 per unit per week
Backorder = $5 per unit per week

Costs
Ordering or
Ordering Holding Backorder Total
Receiving

- - 18 - 18

order 25 45 6 - 51

- - - 15 15

- 20 - 20
- - 20 - 20