The demand for a product in a UPS warehouse follows a normal distribution , for which the mean is 1,000 units per month
Posted: Fri May 20, 2022 6:40 am
The demand for a product in a UPS warehouse follows a normal
distribution , for which the mean is 1,000 units per month and the
standard deviation is 200 units per month. The lead time is 0.25
month for the warehouse. The product is valued at $80 per unit in
the warehouse. The ordering cost is $20 and the inventory carrying
cost is set at 2% per month. A service level of 95% is required
during the lead time. The out-of-stock cost is $10 per unit.
Assuming the manager in this warehouse uses Re-Order point
inventory control policy.
Answers should all be numbers
1. As a result of adopting this policy, what is the average
number of products running out of stock EACH YEAR?
2. As a result of adopting this policy, what is the annual
out-of-stock cost for the warehouse?
3. The manager decides to switch to periodical review policy and
order once every month. If the manager wants to have a service
level of 90% what should be his order up to level (MAX)?
4. The manager decides to switch to a periodical review policy
and order once every month. If the manager wants to have a service
level of 90% how much is the safety stock in the
warehouse?
The manager decides to switch to a periodical review policy and
order once every month. If the manager wants to have a service
level of 90% and on the day of ordering there is still 500 in the
warehouse, how much should the manager order?
distribution , for which the mean is 1,000 units per month and the
standard deviation is 200 units per month. The lead time is 0.25
month for the warehouse. The product is valued at $80 per unit in
the warehouse. The ordering cost is $20 and the inventory carrying
cost is set at 2% per month. A service level of 95% is required
during the lead time. The out-of-stock cost is $10 per unit.
Assuming the manager in this warehouse uses Re-Order point
inventory control policy.
Answers should all be numbers
1. As a result of adopting this policy, what is the average
number of products running out of stock EACH YEAR?
2. As a result of adopting this policy, what is the annual
out-of-stock cost for the warehouse?
3. The manager decides to switch to periodical review policy and
order once every month. If the manager wants to have a service
level of 90% what should be his order up to level (MAX)?
4. The manager decides to switch to a periodical review policy
and order once every month. If the manager wants to have a service
level of 90% how much is the safety stock in the
warehouse?
The manager decides to switch to a periodical review policy and
order once every month. If the manager wants to have a service
level of 90% and on the day of ordering there is still 500 in the
warehouse, how much should the manager order?