Question: Problem 23 Question Help Dayton Electronics demands a part at a daily rate of 44 units. The lead time for replenishment is 7 days for

 Problem 23 Question Help Dayton Electronics demands a part at a

Problem 23 Question Help Dayton Electronics demands a part at a daily rate of 44 units. The lead time for replenishment is 7 days for this item. The standard deviation of demand during the lead time is 10. Dayton Electronics prides itself on having a high level of customer service and strives to achieve a service level of 98%. How much safety stock should Dayton Electronics hold for this item? What will be the annualized cost of this safety stock if the opportunity cost of capital for Dayton Electronics is 15% and the item costs $145? Click the icon to view the table for the z-values for the given probabilities. The safety stock is units. (Enter your response rounded up to the next whole number.) Reference Standard Normal Table Service level z value 0.90 1.28 0.95 1.65 0.98 2.05 0.99 2.33 Print Done Enter your answer in the answer box and then click Check

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 Finance Questions!