Question: Weekly demand at a beer store is 200 cans with a standard deviation of 50. The replenishment lead time is 1 week from the factory.
Weekly demand at a beer store is 200 cans with a standard deviation of 50. The replenishment lead time is 1 week from the factory. The store manager orders 1000 cans when the inventory drops to 300. Each can costs $0.50. The holding cost the store incurs is 40%. Demand during stockout is backlogged.
Suppose the store decides to cut their lot size in half. What is the new customer service level?
| 1 | ||
| 0.49 | ||
| None of the options | ||
| 0.98 | ||
| 0.89 |
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