Question: using this formula: SS = z times ( ( AVGL + r ) times STD ^ 2 + AVG ^ 2 times
using this formula: SS z times AVGLrtimes STD AVGtimes STDL solve this question about saftey stock:
After further analysis, John calculates the lead time to be stochastic with a mean of weeks and a variance of weeks assume a normal distribution of the lead time Furthermore, the need for semiconductors is not really deterministic John heard from his Marketing colleagues. is the expected yearly demand but there is huge uncertainty in that Production and Marketing departments estimate a yearly variance of After tough negotiations, Marketing and Production agreed on a minimum cycle service level is In parallel, John negotiated with the supplier and agreed that he can place an order every months. Assume the fixed ordering costs to be Euros from now on
Given the new estimates, John thought about another policy that could be implemented. What is the appropriate policy in this setting? Calculate the safety stock for this policy.
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