Dave's Auto Supply custom mixes paint for its customers. The shop performs a weekly inventory count of the main colors that are used for mixing paint.
| Average weekly demand | 26 | gallons |
| Standard deviation of demand | 4 | gallons/week |
| Desired service probability | 90 | % |
| Current inventory | 28 | gallons |
| Lead time | 1 | week |
Determine the amount of white paint that should be ordered using the above information: (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)
Answer: 194
Explanation:
| p | 1 | ||
| Average weekly demand, d | 26 | gallons | |
| Standard deviation of demand, Sd | 4 | gallons/week | |
| Desired service probability | 90% | 0.9 | |
| z | NORMSINV(service probability) | 1.282 | |
| Current inventory, I | 28 | gallons | |
| Lead time, LT | 1 week | 7 | days |
| Order quantity, Q | d*(p+LT) + z*Sd*√(p+LT) - I | 194 | gallons |
Dave's Auto Supply custom mixes paint for its customers. The shop performs a weekly inventory count...
Palin’s Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). Annual demand 3,770 mufflers Ordering cost $ 50 per order Standard deviation of daily demand 6 mufflers per working day Service probability 83 % Item cost $ 28.00 per muffler Lead time 2...