Question: Bell computers purchases IC chips from a supplier. The supplier promises an average lead time of ten days with a standard deviation of 2 .
Bell computers purchases IC chips from a supplier. The supplier promises an average lead time of ten days with a standard deviation of days. Based on past Bell has estimated that daily demand is normally distributed with a mean of and a standard deviation of
If Bell wants to maintain a service level of how much safety stock should they hold? What is the reorder point?
If Bell wants to hold days of inventory as safety stock what will their service level be
include variability in lead time itself in your calculations. When lead time is variable, you have to use a different formula to calculate the standard deviation of demand during lead time.
FOr part you know that the safety stock is You have to find the CSL that corresponds to this safety stock
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