Question: A boating supplies distributor has determined that demand for a purchased item averages 9 2 5 units per week with a standard deviation of weekly
A boating supplies distributor has determined that demand for a purchased item averages
units per week with a standard deviation of weekly demand equal to units. The purchasing
leadtime is weeks. Answer the following questions assuming the company is willing to accept a
stockout risk of no more than points
Appendix B Table B from Textbook
a What is the acceptable stockout risk?
What is the required service level?
What value should be used?
b How much safety stock should he held? Show your work using the Microsoft Word equation editor
or by typing to the right of the equation without using the equation editor. Round your answer up to
an integer value if you calculate a fractional value.
Safety Stock
c What reorder point should be used? Show your work using the Microsoft Word equation editor or by
typing to the right of the equation without using the equation editor. Round your answer up to an
integer value if you calculate a fractional value.
ROP
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