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Question 7 A new logistics analyst has approached you regarding a potential problem. Her analysis indicates the cost of a back order is $70 for our Autographed Footballs, but she is not sure what the appropriate safety stock should be. Given this back order cost, what probability of a stock out would be appropriate to use to manage the inventory levels? $200 Football cost Annual Demand Cost per Order Cost to hold the item per year Economic order quantity Lead Time Standard Deviation of Forecasted Demand During Lead Time 5000 units $250 40% 177 2 weeks 20 10% O 5% Correct Answer 4% O 1% Question 8 Given the probability of a stock out you found in the previous problem, what service level would be appropriate to use to manage the inventory levels? Remember, below new logistics analyst indicates the cost of a back order is $70 for our Autographed Footballs. Other key data is $200 5000 units $250 Football cost Annual Demand Cost per Order Cost to hold the item per year Economic order quantity Lead Time Standard Deviation of Forecasted Demand During Lead Time 40% 177 2 weeks 20 Kto Service Level Conversion k 0.00 0.01 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.0 0.5000 0.5040 0.02 0.5080 0.5478 0.5120 0.5160 0.5239 0.5279 0.5199 0.5596 0.5319 0.5714 0.5359 0.5753 0.1 0.5398 0.5438 0.5517 0.5557 0.5636 0.5675 0.2 0.5871 0.6026 0.6064 0.5793 0.6179 0.5832 0.6217 0.5910 0.6293 0.5948 0.6331 0.5987 0.6368 0.6103 0.6480 0.6141 0.6517 0.3 0.6255 0.6406 0.6443 0.4 0.6591 0.6664 0.6772 0.6808 0.6844 0.6879 0.6554 0.6915 0.7257 0.6628 0.6985 0.5 0.7019 0.7088 0.7123 0.7157 0.7190 0.7224 0.6950 0.7291 0.6 0.7324 0.7357 0.7454 0.7517 0.7549 0.6700 0.6736 0.7054 0.7389 0.7422 0.7422 0.7704 0.7734 0.7995 0.8023 0.8264 0.8289 0.7486 0.7794 0.7 0.7580 0.7611 0.7642 0.7673 0.7764 0.7823 0.7852 0.8 0.79.39 0.8051 0.8078 0.8133 0.7881 0.8159 0.7910 0.8186 0.7967 0.8238 0.8106 0.8365 0.9 0.8212 0.8315 0.8340 0.8389 0.8621 1.0 0.8438 0.8461 0.8485 0.8554 0.8577 0.8599 0.8413 0.8643 0.8508 0.8729 0.8531 0.8749 1.1 0.8666 0.8770 0.8790 0.8830 1.2 0.8810 0.8997 0.8869 0.8686 0.8888 0.9066 0.8708 0.8907 0.9082 0.8849 0.9032 0.8925 0.9015 0.8944 0.9115 0.8962 0.9131 0.8980 0.9147 1.3 0.9177 0.9099 0.9251 0.9192 0.9049 0.9207 0.9345 0.9222 0.9265 1.4 1.5 0.9278 0.9236 0.9370 0.9292 0.9418 0.9162 0.9306 0.9429 0.9319 0.9441 0.9332 0.9357 0.9382 0.9394 0.9406 1.6 0.9484 0.9495 0.9515 0.9525 0.9505 0.9599 1.7 0.9582 0.9591 0.9452 0.9463 0.9474 0.9554 0.9564 0.9573 0.9641 0.9649 0.9656 0.97130.97190.9726 0.9608 0.9686 0.9535 0.9545 0.9625 0.9633 0.9699 0.9706 0.9761 0.9767 0.9664 1.8 1.9 0.9616 0.9693 0.9756 0.9671 0.9678 0.9738 0.9744 0.9732 0.9750 90% 0 95% Correct Answer 96% 99% Question 9 Given the service level you found in the previous problem, what K value would be appropriate to use to manage the inventory levels? Remember, a new logistics analyst indicates the cost of a back order is $70 for our Autographed Footballs. Other key data is below: Football cost $200 Annual Demand 5000 units Cost per Order $250 Cost to hold the item per year 40% Economic order quantity 177 Lead Time 2 weeks Standard Deviation of Forecasted Demand During Lead Time 20 Kto Service Level Conversion k 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.0 0.5000 0.5120 0.5199 0.5239 0.5040 0.5438 0.5080 0.5478 0.5160 0.5557 0.5279 0.5675 0.08 0.09 0.5319 0.5359 0.5714 0.5753 0.1 0.5398 0.5517 0.5596 0.5636 0.2 0.5910 0.5948 0.5793 0.6179 0.5832 0.6217 0.5871 0.6255 0.5987 0.6368 0.6026 0.6406 0.6064 0.6443 0.6103 0.6480 0.6141 0.6517 0.3 0.6293 0.6331 0.4 0.6554 0.6591 0.6664 0.6700 0.6736 0.6772 0.6808 0.6844 0.6879 0.6628 0.6985 0.5 0.6915 0.7019 0.7054 0.7088 0.7123 0.7157 0.7190 0.7224 0.6950 0.7291 0.6 0.7257 0.7324 0.7357 0.7389 0.7454 0.7486 0.7517 0.7549 0.7422 0.7734 0.7 0.7580 0.7642 0.7673 0.7704 0.7764 0.7794 0.7823 0.7852 0.7611 0.7910 0.8 0.7881 0.7939 0.7967 0.7996 0.8051 0.8078 0.8106 0.8023 0.8289 0.8133 0.8389 0.9 0.8159 0.8186 0.8212 0.8238 0.8264 0.8315 0.8340 0.8365 1.0 0.8413 0.8438 0.8461 0.8485 0.8554 0.8577 0.8599 0.8621 0.8531 0.8749 1.1 0.8643 0.8665 0.8686 0.8508 0.8729 0.8925 0.8708 0.8770 0.8790 0.8810 0.8830 1.2 0.8849 0.8869 0.8888 0.8907 0.8944 0.8962 0.8980 0.8997 0.9015 1.3 0.9049 0.9066 0.9099 0.9147 0.9162 0.9177 0.9032 0.9192 0.9332 0.9082 0.9236 1.4 0.9222 0.9292 0.9306 0.9207 0.9345 0.9251 0.9382 0.9319 0.9441 1.5 0.9115 0.9131 0.9265 0.9278 0.9394 0.9406 0.9505 0.9515 0.9599 0.9608 0.9678 0.9686 0.9418 0.9525 0.9357 0.9370 0.9474 0.9484 0.9573 0.9582 0.9429 0.9535 0.9452 0.9463 0.9495 1.6 1.7 0.9545 0.9554 0.9564 0.9591 0.9625 0.9616 0.9693 1.8 0.9641 0.9649 0.9656 0.9671 0.9699 0.9664 0.9732 0.9633 0.9706 0.9767 1.9 0.9713 0.9719 0.9726 0.9738 0.9744 0.9750 0.9756 0.9761 O 1.28 Correct Answer 1.75 1.65 O 0.84 Question 10 Pulling this together...using the same data as the last few problems.A new logistics analyst has approached you regarding a potential problem. Her analysis indicates the cost of a back order is $70 for our Autographed Footballs, but she is not sure what the appropriate safety stock should be. Given this back order cost, what would you suggest as the appropriate level of safety stock? Football cost Annual Demand Cost per Order Cost to hold the item per year Economic order quantity Lead Time Standard Deviation of Forecasted Demand During Lead Time $200 5000 units $250 40% 177 2 weeks 20 Kto Service Level Conversion . 0.00 0.01 0.02 0.06 0.06 0.07 0.09 0.04 0.5160 0.0 0.5000 0.03 0.5120 0.5517 0.5040 0.5199 0.5239 0.5279 0.5675 0.08 0.5319 0.5714 0.5359 0.5753 0.1 0.5398 0.5438 0.5557 0.5596 0.5636 0.5080 0.5478 0.5871 0.6256 0.2 0.5948 0.5987 0.6064 0.5793 0.6179 0.5832 0.6217 0.5910 0.6293 0.6026 0.6406 0.6103 0.6480 0.6141 0.6517 0.3 0.6443 0.4 0.6554 0.6772 0.6808 0.6331 0.6700 0.7054 0.6844 0.6591 0.6950 0.6879 0.6628 0.6985 0.6664 0.7019 0.6368 0.6736 0.7088 0.7422 0.5 0.6915 0.7123 0.7157 0.7190 0.7224 0.7549 0.6 0.7291 0.7324 0.7357 0.7454 0.7486 0.7517 0.7257 0.7580 0.7389 0.7704 0.7 0.7611 0.7673 0.7734 0.7764 0.7823 0.7852 0.7881 0.7967 0.7642 0.7939 0.8212 0.8 0.9 0.7910 0.8186 0.8133 0.7995 0.8264 0.8023 0.8289 0.7794 0.8078 0.8340 0.8051 0.8315 0.8159 0.8238 0.8106 0.8366 0.8599 0.8389 1.0 0.8438 0.8461 0.8485 0.8531 0.8554 0.8577 0.8413 0.8643 0.8508 0.8729 0.8621 0.8830 1.1 0.8665 0.8686 0.8708 0.8749 0.8770 0.8790 0.8810 1.2 0.8888 0.8925 0.8944 0.8962 0.8980 0.8997 0.8849 0.9032 0.9192 0.8869 0.9049 0.8907 0.9082 0.9015 0.9177 0.9099 0.9115 0.9131 0.9162 0.9066 0.9222 0.9357 0.9147 0.9292 0.9207 0.9265 0.9278 0.9306 0.9319 0.9236 0.9370 0.9251 0.9382 1.5 0.9332 0.9345 0.9394 0.9406 0.9418 0.9429 0.9441 1.6 0.9452 0.9463 0.9474 0.9484 0.9525 0.9535 0.9495 0.9591 0.9505 0.9599 0.9515 0.9608 0.9545 0.9633 1.7 0.9554 0.9564 0.9573 0.9582 0.9616 0.9625 1.8 0.9641 0.9649 0.9664 0.9671 0.9678 0.9686 0.9693 0.9699 0.9706 0.9656 0.9726 1.9 0.9713 0.9719 0.9732 0.9738 0.9744 0.9750 0.9756 0.9761 0.9767 10 15 20 30 Correct Answer 35