Question: Daily demand for a certain product is normally distributed, with a mean of 200 and a standard deviation of 25. The supplier is reliable and

Daily demand for a certain product is normally distributed, with a mean of 200 and a standard deviation of 25. The supplier is reliable and maintains a constant lead time of 4 days. The cost of placing an order is $10 and the cost of holding inventory is $0.50 per unit per year. Consider service level of 90%.

  1. What is the required safety stock?

A. 64

B. 75

C. 54

D. 85

What is the reordering point?

A. 575

B. 666

C. 864

D. 762

What happens to the reordering point if the service level is 95%?

A.Increase

B. Cannot be determined

C. No change

D. Decrease

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!

Q:

Daily demand for a certain product is normally distributed with a mean of 6 0 and standard deviation of 7 . The source of supply is reliable and maintains a constant lead time of six days. The cost...

Q:

Question 1 9 2 . 5 p t s Daily demand for a certain product is normally distributed with a mean of 6 0 and standard deviation of 7 . The source of supply is reliable and maintains a constant lead...

Q:

Daily demand for a certain product is normally distributed with a mean of 100 and standard deviation of 10. The source of supply is reliable and maintains a constant lead time of five days. What is...

Q:

Daily demand for a certain product is normally distributed with a mean of 6 0 and standard deviation of 7 . The source of supply is reliable and maintains a constant lead time of six days. The cost...

Q:

Daily demand for a certain product is normally distributed with a mean of 60 and standard deviation of 7. The source of supply is reliable and maintains a constant lead time of six days. What is the...

Q:

Daily demand for a certain product is normally distributed with a mean of 60 and standard deviation of 7. The source of supply is reliable and maintains a constant lead time of six days. What is the...

Q:

Daily demand for a certain product is normally distributed with a mean of 100 and standard deviation of 10. The source of supply is reliable and maintains a constant lead time of five days. What is...

Q:

Daily demand for a certain product is normally distributed with a mean of 100 and standard deviation of 10. The source of supply is reliable and maintains a constant lead time of five days. What is...

Q:

Daily demand for a certain product is normally distributed with a mean of 100 and standard deviation of 10. The source of supply is reliable and maintains a constant lead time of five days. What is th

Q:

Daily demand for a certain product is normally distributed, with a mean of 200 and a standard deviation of 25. The supplier is reliable and maintains a constant lead time of 4 days. The cost of...

Q:

Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a regular...

Q:

In year 2020, J.C. Olson & Co. had earnings per share of $6 and paid a $4 dividend per share. During the same period, the total retained earnings increased by $24,000,000. Olson has no preferred...

Q:

One reason that private equity firms are interested in franchising is that the royalties provide a continuous revenue stream. True False Clear selection

Q:

atch the compensation objectives with their meanings. Efficiency Efficiency drop zone empty. Fairness Fairness drop zone empty. Compliance Compliance drop zone empty. Improving performance and...