Question: Q. 7. Management has stated that it will tolerate one stock out per year. The forecast of annual demand for a particular SKU is 52,000

Q. 7. Management has stated that it will tolerate one stock out per year. The forecast of annual demand for a particular SKU is 52,000 units, and it is ordered in quantities of 2600 units, and the standard deviation of demand during lead time is 100 units. The lead time is 2 weeks.

Calculate:

a. Number of orders for twelve months (3 marks)

b. Service level (3marks)

c. Safety stock (3 marks)

d. The order point (3marks)

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