Question: Part E. Wholesale E that has been assuming constant rate demand noticed stochastic weekly demand. Since this has caused problems, it was decided to investigate

Part E. Wholesale "E" that has been assuming

Part E. Wholesale "E" that has been assuming constant rate demand noticed stochastic weekly demand. Since this has caused problems, it was decided to investigate stochastic demand inventory policies. The lead time of 1.5 weeks and the inventory period of 5.5 weeks were known but a 4% stockout level was chosen to consider an inventory policy in their periodic review systems. They requested weekly demand and received the histogram of weekly demand. Upon viewing the frequency distribution, the weekly demand was assumed to normally distributed. Histogram of Weekly Demand 120 95 100 80 55 Frequency 60 60 40 20 25 15 1 0 500 900 600 700 800 Weekly Demand Question 9. What is their inventory policy? A. (1.5 week, 4041 ) B. (4.0 weeks , 4966) C. (5.5 weeks , 5343) D. (7.0 weeks , 5846 ) E. none of the above

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