Question: A B C D Q . 3 Order Quantity Q 1 , 5 0 0 units Annual demand D 4 0 , 0 0 0

A B C D Q.3 Order Quantity Q 1,500 units Annual demand D 40,000 units per year Standard deviation of annual demand sD 5,800 units per year Mean lead time L years Standard deviation of lead time sL 0.05 years Type 1 Service Level a Standard deviation of demand during the lead time sDL 2,714 units per lead time Mean demand during the lead time DL 4,000 units per lead time Standard normal variate Z Safety Stock SS 2,000 units
Please consider the demand and lead time information provided. The logistics manager arbitrarily sets the safety stock level to 2,000 units. What is the in-stock rate that is achieved in this case?
Hint: You need to work backwards here and compute the value of z that corresponds to a safety stock of 2,000 units and then convert this value to a type 1 service level as =normsdist(z)
 A B C D Q.3 Order Quantity Q 1,500 units Annual

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