Problem One (25 points): Below table shows the sale history for the past 10 weeks of...

  

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Problem One (25 points): Below table shows the sale history for the past 10 weeks of a furniture company. The operation manager knows that her company tolerate just one stockout per year. She was given the forecast of annual demand for a specific part to be 100,000 units with a 2 weeks lead time. If the order quantity is 10,000 units, calculate: a) Sigma for the demand history time interval. b) Sigma for the lead time interval. c) The service-level. d) The safety stock required for this service level. e) The order-point. f) Recently management said that they consider the service level tb one stockout every 2 years, what would the new safety stock be? If the cost of carrying Inventory on this item is $10 per unit per year, what is the cost of increasing the inventory from one stockout per year to one every 2 years? Week Actual Deviation Deviation Demand Squured 1. 2100 1700 3 2600 1400 5. 1800 23000 2200 8. 1600 2100 2200 Total Problem One (25 points): Below table shows the sale history for the past 10 weeks of a furniture company. The operation manager knows that her company tolerate just one stockout per year. She was given the forecast of annual demand for a specific part to be 100,000 units with a 2 weeks lead time. If the order quantity is 10,000 units, calculate: a) Sigma for the demand history time interval. b) Sigma for the lead time interval. c) The service-level. d) The safety stock required for this service level. e) The order-point. f) Recently management said that they consider the service level tb one stockout every 2 years, what would the new safety stock be? If the cost of carrying Inventory on this item is $10 per unit per year, what is the cost of increasing the inventory from one stockout per year to one every 2 years? Week Actual Deviation Deviation Demand Squured 1. 2100 1700 3 2600 1400 5. 1800 23000 2200 8. 1600 2100 2200 Total

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