Calculate the expected cost per stockout with the following information: Probability of a back order is 50%, lost sale is 25%, and the probability of a lost customer is 25%. The cost per incident of a back order is $150, lost customer is $250,000. Sales price of the item is $1,500 with a 20% profit margin. The average order is 50.
a) $250,000
b) $150
c) $15,000
d) $66,325
e) None of the above
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Home » Business » Calculate the expected cost per stockout with the following information: Probability of a back order is 50%, lost sale is 25%, and the probability of a lost customer is 25%. The cost per incident of a back order is $150, lost customer is $250,000.