Question: Weekly demand for a certain product is normally distributed with mean 200 and standard deviation 10. The source of supply is reliable and maintains a

Weekly demand for a certain product is normally distributed with mean 200 and standard deviation 10. The source of supply is reliable and maintains a constant leadtime of 1 week. The cost of placing an order is $10 and annual holding cost is $3 per unit. Assume 52 weeks per year. Management wants to satisfy a 95% probability of not running out of stock in any one ordering cycle.

1. What is the average demand during leadtime?

2. What is the standard deviation of demand during leadtime?

3. What should be the safety stock?

4. What should be the reorder point?

5. What should be the order quantity?

6. State the ordering policy by using a sentence.

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 General Management Questions!

( Note: In the exams/quizzes, z-values will be given. But, for homework problems, you need to find z-values for yourselves.) I. Suppose weekly demand for an item is 200 units. Annual holding cost is...

HW#3. Selve the following problems. Show your work. Due 1/8 (Thu). Worth 20 points. (Note: In the exams/quizzes, z-values will be given. But, for homework, you need to find z- values for yourselves.)...

I. Suppose weekly demand for an item is 200 units. Annual holding cost is $10 per unit, and ordering cost is $20 per order. Assume 52 weeks per year. 1. What is the EOQ? If the EOQ is used for order...

II. Weekly demand for a certain product is normally distributed with mean 200 and standard deviation 10 . The source of supply is reliable and maintains a constant leadtime of 1 week. The cost of...

II. Weekly demand for a certain product is normally distributed with mean 200 and standard deviation 10. The source of supply is reliable and maintains a constant leadtime of 1 week. The cost of...

thank you II. Weekly demand for a certain product is normally distributed with mean 200 and standard deviation 10. The source of supply is reliable and maintains a constant leadtime of 1 week. The...

II. Weekly demand for a certain product is normally distributed with mean 200 and standard deviation 10. The source of supply is reliable and maintains a constant leadtime of 1 week. The cost of...

Grayson Industries has collected the following data for one of its products: Direct materials standard (4 pounds per unit @ $0.50/lb.) $2 per finished good Direct materials flexible budget...

Consider two firms producing smart phones. One uses a highly automated robotics process, whereas the other uses workers on an assembly line and pays overtime when there is heavy production demand. a....

The minimum terms required for formation of an agreement under the Uniform Commercial Code ( UCC ) are: a . the subject matter and quantity. b . transfer of title to tangible personal property and...

See the problem below: Problem 4: During the housing boom in the 2000s, the price of financial services in the U.S. soared. Assume that the financial service sector, Y, is more executive-intensive...