Question: Consider a retail store that uses the order - up - to model when ordering from its supplier. Orders are placed at the beginning of
Consider a retail store that uses the orderupto model when ordering from its supplier. Orders are placed at the beginning of each week and received with a week lead time. Weekly demand follows a Poisson distribution with mean
points What is the average onorder inventory when the retail store uses an orderupto level of S
b points What is the average onhand inventory when the retailer store uses an orderupto level of S
c what is the minimum orderupto level required to achieve an instock probability of at least
d points Suppose that parent company of this retail store has identical retail stores each facing the same demand as above and their inveinventorytory is pooled. So instead of each store ordering and holding its own inventory, inventory is shared from a common pool of inventory. What is the onhand inventory to achieve an instock probability of at least Compare it to the toal onhand inventory with stores but without pooling so times the onhand inventory corresponding to your answer in part c and explain the difference.
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