Question: IM Systems (Problem 13.39) is considering purchasing monitors from a U.S. manufacturer that would guarantee a lead time of eight days, instead of from the

IM Systems (Problem 13.39) is considering purchasing monitors from a U.S. manufacturer that would guarantee a lead time of eight days, instead of from the Taiwanese company. Determine the new reorder point given this lead time and identify the factors that would enter into the decision to change manufacturers. 


Data in Problem 13.39

IM Systems assembles microcomputers from generic components. It purchases its color monitors from a manufacturer in Taiwan; thus, there is a long lead time of 25 days. Daily demand is normally distributed with a mean of 3.5 monitors and a standard deviation of 1.2 monitors. Determine the safety stock and reorder point corresponding to a 90% service level. 

Step by Step Solution

3.52 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The reorder point is calculated by taking the average demand during the lead time and adding the saf... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Operations Management Questions!