Question: IM Systems assembles microcomputers from generic components. It purchases its color monitors from a manufacturer in Taiwan; thus, there is a long lead time of
IM Systems assembles microcomputers from generic components. It purchases its color monitors from a manufacturer in Taiwan; thus, there is a long lead time of days. Daily demand is normally distributed with a mean of monitors and a standard deviation of monitors. What is the reorder point corresponding to a service level? IM systems is considering purchasing monitors from a US manufacturer that would guarantee a lead time of eight days, instead of from the Taiwanese company. Determine a new reorder point given this lead time and identify the factors that would enter into the decision to change manufacturers.
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