Rose Office Supplies, Inc., which is open six days a week, uses a two-week periodic review for
Question:
a. What is the mean or expected demand during the review period plus the lead-time period?
b. Under the assumption of independent demand from week to week, the variances in demands are additive. Thus, the variance of the demand during the review period plus the lead-time period is equal to the variance of demand during the first week plus the variance of demand during the second week plus the variance of demand during the lead-time period. What is the variance of demand during the review period plus the lead-time period? What is the standard deviation of demand during the review period plus the lead-time period?
c. Assuming that demand has a normal probability distribution, what is the replenishment level that will provide an expected stock-out rate of one per year?
d. On Monday, March 22, 18 notebooks remain in inventory at the store. How many notebooks should the store manager order?
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Related Book For
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam
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