Homework Answers
a.
Number of pints to order = Order up to level - inventory position = 285-(200+73) = 12
b.
Fill rate = 1-(Expected backorder/Expected demand)
or, 0.99 = 1-(Expected backorder/Expected demand)
or, Expected backorder = 100*(1-0.99) = 1
Expected backorder = Standard deviation *L(z)
or, 1 = 34*sqrt(2)*L(z)
or, L(z) = 1/(34*sqrt(2)) = 0.020797258
From standard normal loss table, we see corresponding z = 1.65
Hence order-up-to level = 200+1.65*34*sqrt(2) = 279.3373808 = 280 (Rounded to whole number)
c.
Average order quantity = Mean demand/7 = 100/7 = 14.28571429 =
14.3 pints (Rounded to 1 decimal place)
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