Demand for 2 ounce potato chip bags is normally distributed. The average demand during the lead time is 800,000 bags wit
Posted: Fri May 20, 2022 7:51 am
Demand for 2 ounce potato chip bags is normally distributed. The
average demand during the lead time is 800,000 bags with a variance
during the lead time of 80,000. Cost per bag is $0.24; ordering
costs are $25 per order; inventory handling cost is $0.04 per bag
per year. Acquisition lead time is six weeks. The company works 50,
5-day weeks per year. What is the most likely level of safety stock
if the desired stock out risk is 0.2%?
a. 800,814 bags
b. 800,282 bags
c. 814 bags
d. 282 bags
e. 288 bags
average demand during the lead time is 800,000 bags with a variance
during the lead time of 80,000. Cost per bag is $0.24; ordering
costs are $25 per order; inventory handling cost is $0.04 per bag
per year. Acquisition lead time is six weeks. The company works 50,
5-day weeks per year. What is the most likely level of safety stock
if the desired stock out risk is 0.2%?
a. 800,814 bags
b. 800,282 bags
c. 814 bags
d. 282 bags
e. 288 bags