Auto parts retailer

SparesRUs, an auto parts retailer, must decide on the order size for a 20-year-old model of brakes. The manufacturer plans to discontinue production of these brakes after this last production ran. SparesRUs has forecast remaining demand for the brakes to be normally distributed, with a mean of 150 and a standard deviation of 40. The brakes have a retail price of 2(K). Any unsold brakes are useless and have no salvage value. The manufacturer plans to sell each brake for 50 if the order is for less than 200 brakes and 45 if the order is for at least 200 brakes. How many brakes should SparesRUs order ... 

Distributor storage with last-mile delivery requires higher levels of inventory than the other options (except for retail stores) because it has a lower level of aggregation. From an inventory perspective, warehouse storage with last-mile delivery is suitable for relatively fast-moving items that are needed qnickly and for which some level of aggregation is beneficial. Auto parts required by car dealers fit this description. 

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