Question: Consider a periodic review system, where orders are placed every 18 days. The firm strives to provide a 94.41% cycle service level. Demand averages 425

Consider a periodic review system, where orders are placed every 18 days. The firm strives to provide a 94.41% cycle service level. Demand averages 425 units per day, and the standard deviation of demand per day is 105 units. Lead time is 12 days (round Z-values, standard deviations to two decimal places).

Consider a periodic review system, where orders are placed every 18 days.

Consider a periodic review system, where orders are placed every 18 days. The firm strives to provide a 94.41% cycle service level. Demand averages 425 units per day, and the standard deviation of demand per day is 105 units. Lead time is 12 days (round Z-values, standard deviations to two decimal places). a. How many units of safety stock should be held? units (round your response to the nearest integer). b. What should the target inventory level (order-up-to level) be? units (round your response to the nearest integer). c. Suppose that it is time to review the item. There are 154 units in inventory, and there is an outstanding backorder for 441 units. An order for 131 units is on the way. How many units should be ordered now? units (round your response to the nearest integer)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!