A company has decided to order 360 units whenever the on-hand inventory falls to 90 units. There

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A company has decided to order 360 units whenever the on-hand inventory falls to 90 units. There appears to be no seasonal fluctuation to the demand, but it does fluctuate daily and is approximately normally distributed. Historically, the lead time has been four days, and the average sales during this four day period is 72 units with a standard deviation of 10 units. There are 250 working days per year. How much safety stock is the company carrying? What service level is implied by this policy?

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Quantitative Analysis for Management

ISBN: 978-0132149112

11th Edition

Authors: Barry render, Ralph m. stair, Michael e. Hanna

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