Example 5.5 Harvey feels uncomfortable with assumption that the stock-out cost is $25 and decide to use a service level criterion instead. Suppose tha
{"Image DocumentName": "Service Levels in (Q, R) System", "Image ImageDescription": "Example 5.5. Harvey feels uncomfortable with assumption that the stock-out cost is  25 and decide to use a service level criterion instead. Suppose that he chooses to use 98%. Type 1 service: \uf061=0.98, find R to solve F(R)=0.98. From Table A-4, z=2.05, R= \uf073z+\uf06d=25\uf0b4 =151. Type 2 service: \uf062=0.98, n(R)=EOQ(1- \uf062), which corresponds to L(z)= EOQ(1- \uf062)/ \uf073=100(1-0.98)/25=0.08. From Table A-4, z=1.02, then R= \uf073z+\uf06d=25\uf0b4 =126. The same values of \uf061 and \uf062 gives considerably different values of R.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}