Question: Weekly demand for a television is normally distributed with mean 55 and standard deviation 19. The lead time from the plant to your store is
Weekly demand for a television is normally distributed with mean 55 and standard deviation 19. The lead time from the plant to your store is 3 weeks and you order inventory replenishments weekly. You use the order-up-to model to control inventory.
1. Suppose the order-up-to level is S=250.
- You are preparing to place an order and note that your inventory level is 111 and you have 78 televisions on order. How many televisions will you order? (Provide your answer as an integer.)
- The following week, your inventory level is 189 and you have 64 televisions on order. How many televisions will you order? (Provide your answer as an integer.)
2. What order-up-to level would you choose if you want to achieve a 98.75% in-stock probability? (Provide your answer to two decimal places.)
3. Suppose the order-up-to level is S=220.
- What is your expected on-hand inventory? (Provide your answer to two decimal places.)
- What is your expected on-order inventory? (Provide your answer as an integer.)
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