Answer Happy

Cyber Chemicals uses liquid nitrogen on a regular basis. Average daily demand is normally distributed with a mean of 175 gallons and a standard deviation of 45. Cyber operates Six days a week and orders from its supplier once each week. The supplier takes one week to deliver Cyber's order. a. Suppose an order-up-to level of 2000 is used. What is the average order quantity? b. Suppose an order-up-to level of 2500 is used. What is the expected on-hand inventory? Use Table 14.1 c. Suppose an order-up-to level of 2580 is used. What is the expected on-order inventory? (Round your answer to 4 decimal places.) Suppose an order-up-to level of 2699 is used. What is the in-stock probability? Use Table 14.1 d. (Round your answer to 4 decimal places.) Suppose an order-up-to level of 2450 is used. What is the stockout probability? Use Table 14.1 e. f. Suppose Cyber Chemicals wants a 0.945 in-stock probability. What should the order-up to level be? Use Excel and round to nearest integer. < Prev 6 of 7 Next >
In the order-up-to model, assume that the mean of demand in a period remains the same and the target in-stock probability is kept at a constant level. If the demand uncertainty (the standard deviation of demand in each period) increases, then O expected on-hand inventory increases. K O expected on-hand inventory decreases. expected on-hand inventory remains the same. aces O expected on-hand inventory may increase or decrease, depending on the demand distribution and other parameters