Consider a periodic review system, where orders are placed every 20 days. The firm strives to provide a 95.5% cycle ser
Posted: Thu May 05, 2022 11:05 am
Consider a periodic review system, where orders are placed every
20 days. The firm strives to provide a 95.5% cycle service
level (Z=1.695). Demand averages 505 units per day, and
the standard deviation of demand per day is 121 units. Lead time is
12 days.
(Round all quantities to the nearest whole unit)
a. How many units of safety stock should be held
Safety Stock =
units
b. What should the target inventory level (order-up-to
level) be?
Target =
units
c. Suppose that it is time to review the item. There are 150
units in inventory, and there is an outstanding backorder for 400
units. An order for 204 units is on the way. How many units should
be ordered now?
Order Quantity =
units
20 days. The firm strives to provide a 95.5% cycle service
level (Z=1.695). Demand averages 505 units per day, and
the standard deviation of demand per day is 121 units. Lead time is
12 days.
(Round all quantities to the nearest whole unit)
a. How many units of safety stock should be held
Safety Stock =
units
b. What should the target inventory level (order-up-to
level) be?
Target =
units
c. Suppose that it is time to review the item. There are 150
units in inventory, and there is an outstanding backorder for 400
units. An order for 204 units is on the way. How many units should
be ordered now?
Order Quantity =
units