Your new company has decided to use a periodic review system. You have learned that average weekly demand is 48 units per week with a standard deviation of 8 units. You believe that your cycle-service level should be 94 percent. Lead time is two weeks. Initially, you believe that you should do a review every Friday. Determine the required safety stock and the target inventory level.
(a) How would this procedure change if the cycle-service level needed to be 98 percent?
(b) What is the impact of changing the review period from every Friday to every other Friday, assuming that the cycle-service level is 94 percent?

  • CreatedJuly 11, 2014
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