The daily demand for Superco's grocery store for bananas is normally distributed with a mean of...

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The daily demand for Superco's grocery store for bananas is normally distributed with a mean of...

The daily demand for Superco's grocery store for bananas is normally distributed with a mean of 60 and a standard deviation of 13.5. Superco's would like to keep a service level of 98%. Additionally, the lead time for new shipments of bananas is 9 days.

What is the optimal reorder point for bananas at Superco?

652

612

624

426

math Statistics-And-Probability

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Answer 1

Answer #1

mean lead time μ_l=	9
standard deviation during lead time σ_l=		0
mean demand μ_d=	60
standard deviation of demand σ_d=		13.5

for 98% service level , corresponding critical z =

2.05

reorder point=demand during material in transit+safety stock
=lead time*demand/time period +safety stock
=μ_lμ_d+zsqrt(μ_lσ_d²+μ_d²σ_l²) =			623.025~ 624

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Answer 2

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