Question: Demand for an item is Normally distributed with a mean of 1,000 units a month and a standard deviation of 100 units. Currently they check

Demand for an item is Normally distributed with a mean of 1,000 units a month and a standard deviation of 100 units. Currently they check stock every three months and lead time is constant at one month. They wish to maintain a 98% service level and the holding cost is $20 a unit a month. They are considering increasing the review period to every four months. How will this change impact their safety stock costs?

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:

Question A. 1. During a period of contractionary monetary policy, a)the price level is increased, which leads to an increase in the money supply. b)the price level is decreased ,which leads to a...

Q:

Inventory Models Managers at Wager Fabricating Company are reviewing the economic feasibility of manufacturing a part that it currently purchases for a supplier. Forecasted annual demand for the part...

Q:

Inventory Models Managers at Wager Fabricating Company are reviewing the economic feasibility of manufacturing a part that it currently purchases for a supplier. Forecasted annual demand for the part...

Q:

If the demand for an item is Normally distributed with a mean of 500 units a month and standard deviation of 50 units. The company check stock every 6 months and lead time is constant at 3 month. The...

Q:

14. The weekly demand for an item is normally distributed with a mean (average) of 100 and a weekly standard deviation of 25. The lead time for replenishment for this item is 4 weeks. The company...

Q:

If the demand for an item is Normally distributed with a mean of 500 units a month and standard deviation of 50 units. The company check stock every 6 months and lead time is constant at 3 month. The...

Q:

14. The weekly demand for an item is normally distributed with a mean (average) of 100 and a weekly standard deviation of 25. The lead time for replenishment for this item is 4 weeks. The company...

Q:

Walt Disney studios will release a new kids movie on the July 4th weekend. They are planning to sell an action figure based on the movies protagonist. All sales will occur during a three-week period...

Q:

Information for questions 6.7, and 8 : Walt Disney studios will release a new kids' movie on the July 4 th weekend. They are planning to sell an action figure based on the movie's protagonist. All...

Q:

PPC Company finds that demand for an item is Normally distributed with a mean of 2 , 0 0 0 units a year and standard deviation of 4 0 0 units. Unit cost is $ 1 0 0 , reorder cost is $ 2 0 0 , holding...

Q:

a)2Va/L b) 4Va/L c) Va/L d) 6Va/L An infinite deep one dimensional Square will has x=0 and X=L. Two small perturbing Potentials of width 'a' and height 'V' are located at x = 4/4 and x = 34/4, where...

Q:

Choose one (1) creation myth from pages 17-39 of the textbook (excluding all Greek and Roman myths) and write a one (1) page reflection in which you answer the following questions: Which type of...

Q:

Find the indefinite integral and state the result in terms of x . ( Remember the constant of integration. ) 1 x 2 + 3 x + 6 dx

Q:

A piston/cylinder has a water volume separated in V A = 0.2 m 3 and V B = 0.3 m 3 by a stiff membrane similar to the one in Fig. P6.128. The initial state in A is 1000 kPa, x = 0.75, and in B it is...

Q:

Compute the weakest precondition for each of the following selection constructs and their postconditions: a. if (a == b) b = 2 * a + 1 else b = 2 * a; {b > 1} b. if (x

Q:

Refer to the Baseball 2018 data, which report information on the 30 Major League Baseball teams for the 2018 season. Set up a variable that divides the teams into two groups, those that had a winning...

Q:

The United States consistently imports much more than it exports. The annual gap is consistently several hundred billion dollars. Does this concern you? If so, what should be done about it? If not,...

Q:

You have been asked to consider investing in ASAP Printing Services Inc. Additional information: Total assets at January 1, 2019, were $4,050,000. Net income for 2019 was $420,000. No new shares were...

Q:

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

Q:

12. Why are confounding variables such a problem in research? a) They are difficult for participants to give responses to b) They make questionnaires too long for participants to complete c) They...

Q:

A researcher is interested in comparing the stress levels of nurses, junior doctors and consultants in a busy city centre hospital. They have asked a sample of each occupation to complete a stress...

Q:

15. Take a look at the following scattergram. What can you conclude about the relationship between the two variables? a) That there is a negative relationship between minutes spent with patients and...