Blue & White Coffee (B&W) orders their organic coffee filters from an international supplier, which results...
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Blue & White Coffee (B&W) orders their organic coffee filters from an international supplier, which results in longer lead times to replenish inventories. B&W uses 110 filters a day with a standard deviation in daily demand of 10 per day. Considering how important it is to have these organic coffee filters available when needed, they have set their service level at 99% (z = 2.33) in hopes of avoiding stockouts. It takes 9 days to receive a shipment and the standard deviation of the shipping time is 2 days. What is their reorder point? Blue & White Coffee (B&W) orders their organic coffee filters from an international supplier, which results in longer lead times to replenish inventories. B&W uses 110 filters a day with a standard deviation in daily demand of 10 per day. Considering how important it is to have these organic coffee filters available when needed, they have set their service level at 99% (z = 2.33) in hopes of avoiding stockouts. It takes 9 days to receive a shipment and the standard deviation of the shipping time is 2 days. What is their reorder point?
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To calculate the reorder point for Blue White Coffee BW we need to consider the lead time demand and ... View the full answer
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