Question: Weekly demand for Dell computers at a Costco store is normally distributed, with a mean of 250 and a standard deviation of 156. The store

Weekly demand for Dell computers at a Costco store is normally distributed, with a mean of 250 and a standard deviation of 156. The store manager continuously monitors inventory and currently orders 1,000 computers each time the inventory drops to 600 units. Dell currently takes two weeks to fill an order (lead time).

1. How much safety inventory does the store carry?

2. What CSL does Costco achieves as a result of this policy?

3. How much safety inventory should Costco carry if they desire to improve its CSL by 10%?

Weekly demand for Dell computers at a Costco store is normally distributed,

Average demand per week = Standard deviation of weekly demand = Average lead time for replenishment L= Order quantity Q= ROP = EDDLT =dL= Part 1 Safety inventory carried = Standard deviation of demand during lead time = Part 2 CSL= New CSL = z= Part 3 Safety inventory =

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