Question: John's uses a fixed order interval inventory system. Demand per week is 8 units with a standard deviation of 5 units per week. Lead time

 John's uses a fixed order interval inventory system. Demand per week

John's uses a fixed order interval inventory system. Demand per week is 8 units with a standard deviation of 5 units per week. Lead time has been shown to be 1 weeks. John's believes reviewing the inventory level every 6 weeks is the ideal policy, and that a service level of 70% is acceptable. If the current inventory position is 7 units, and it is time to place an order, what order quantity should be placed? Present your answer as an integer value (rounded up). Do not round your intermediate calculations. \begin{tabular}{|c|c|} \hline OrderQuantity \\ \hline \end{tabular} What is the probability that John's will run out of inventory before the next order arrives? Present your answer as a percentage rounded to two (2) decimal places (e.g., 99.50). Do not include the \% sign. Do not round your intermediate calculations. \begin{tabular}{|c|l|} \hline StockoutRisk & \\ \hline \end{tabular}

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!