Question: A firm forecasts demand for an item using exponential smoothing with a=0.3. The following table is a history of forecast versus actual demand for the

A firm forecasts demand for an item using

A firm forecasts demand for an item using exponential smoothing with a=0.3. The following table is a history of forecast versus actual demand for the past year. Month Actual Demand (units) Forecast of Demand (Units) Jan 75 70 Feb 60 72 March 72 68 63 69 Apr. May 75 67 June 69 69 80 69 July Aug. 60 72 Sep. 66 68 Oct. 68 67 Nov. 71 67 Dec. 72 68 The company reviews the inventory status of this item every 6 months. It is now reviewing the item to make a reorder decision for the period January to June. The current inventory level is 60 units. When an order is placed, delivery of the order is instantaneous. If the company wishes to provide a 95% service level over the next six months, what is the size of the order that should be placed? Note: Service level is defined as the probability of not stocking out over a cycle

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