Practice Problem 1. Consider the following information for a product: Lead time is 3 weeks. The average weekly demand is 1500 and weekly standard deviation is 300. If company wants to have cycle service level of 90%. What should the safety stock be?
Safety stock is helpful to tackle the unexpected demand, demand variation and fluctuation in stock prices etc.
Practice Problem 1. Consider the following information for a product: Lead time is 3 weeks. The...
A brand of soap has a lead time of eight weeks to reorder, a weekly average usage of 20 units and a weekly standard deviation of 8 units. The reorder point for this soap, assuming a 99% service level (z-score = 2.33)
Demand during lead time for one brand of TV is normally distributed with a mean of 36 TVs and a standard deviation of 15 TVs. What safety stock should be carried for 90% service level? What is the appropriate reorder point? Click the icon to view the normal table What safety stock should be carried for a 90% service level? Safety stock units (round your response to the nearest whole number).
GG finds that the demand is really uncertain. The typical leadtime for supply is 9 weeks. The standard deviation of demand during the leadtime is 120. If GG wants to provide 95% cycle service level, what should be the safety stock and reorder level? Show calculations to get credit.
1. Linda L. is in charge of maintaining hospital supplies at General Hospital. During the past year the lead-time when ordering the BX-5 bandage was six weeks. Monthly (four weeks) mean demand was 300 and monthly standard deviation of the demand was 27 units. 1.1 What is the reorder point needed to maintain a cycle service level of 99%? a. NORMINV(.99,300,27) b. NORMINV(.99,300*4/6, 27*4/6) C. NORMINV(.99, 300*6/4,27*6/4) d. None of the above 1.2 Note the additional information: It costs $1.50...
M7_IND5. Peter Sagan is in charge of maintaining hospital supplies at Champs Hospital. During the past year the mean weekly demand for a special type of tubing was 186 packages of this tubing with a standard deviation of 13 packages of tubing. The lead time for receiving this tubing from the supplier is 1.5 weeks. Peter would like to maintain a 95% service level and places an order for 750 packages every time an order is placed. a) How much...
HighLife corporation has the following information: Average demand = 30 units per day Average lead time = 40 days Item unit cost = $45 for orders of less than 400 units Item unit cost = $40 for orders of 400 units or more Ordering cost = $50 Inventory carrying cost = 15% The business year is 300 days Standard deviation of demand during lead time = 90 Desired service level = 95% What is the TAC at $40/unit?
Sam's Cat Hotel operates 52 weeks per year, 7 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.25 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. Demand 96 bags/week Order cost- $58/order >Annual holding cost 26 percent of cost > Desired cycle-service level 90 percent > Lead time 1 week(s) (7 working days) > Standard deviation of weekly demand 13 bags >Current on-hand...
A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides a 95% service level? The answer is 41. How do you arrive at this answer? (what are the calculations)
Peter Sagan is in charge of maintaining hospital supplies at Champs Hospital. During the past year the mean weekly demand for a special type of tubing was 186 packages of this tubing with a standard deviation of 13 packages of tubing. The lead time for receiving this tubing from the supplier is 1.5 weeks. Peter would like to maintain a 95% service level and places an order for 750 packages every time an order is placed. a) How much safety...
A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides an 85% service level? A. 133 B. 165 C. 26 D. 41 O E. 126