Question: Suppose that weekly demand for an item is normally distributed with a mean of 3000 and a standard deviation of 300. Lead time is 9

Suppose that weekly demand for an item is normally distributed with a mean of 3000 and a standard deviation of 300. Lead time is 9 weeks on average with a standard deviation of 3 weeks. They seek a CSL of 88.1%. Our goal is to determine the required safety stock to reach that service level, along with the associated re-order point.

Expected demand during the lead time: D L = D L =

Standard deviation of demand during the lead time: L = L D 2 + D 2 s L 2 = (ROUND TO AN INTEGER)

Using the normal table below, find the z-value associated with the desired CSL: z S L =

Safety stock needed to reach given CSL: S S = z S L L = (ROUND TO AN INTEGER)

Orders should be placed when inventory falls to re-order point: R O P = D L + S S = (ROUND TO AN INTEGER)

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