Phyllis was just hired as the new purchasing manager at Rich Furniture, and she decided to recalculate
Question:
Phyllis was just hired as the new purchasing manager at Rich Furniture, and she decided to recalculate all of their ROPs, since she noticed that many of the suppliers’ delivery times varied substantially from one order to the next. Phyllis asked Mary Jane, her buyer, to recalculate the first one (a desk), to make sure it was done correctly. Phyllis also wanted to know the safety stock required. The upcoming annual demand forecast was 950 desks. The purchase order lead times varied, with an average of 18 days and a standard deviation of 6 days. The daily demand also varied, with an average of 3 units per day, and a standard deviation of 5 desks per day. They would like to maintain a 98 percent service level.
Step by Step Answer:
Operations Management A Supply Chain Process Approach
ISBN: 978-1483383064
1st edition
Authors: Joel D. Wisner