About stocking out during order lead times

Assignment Help Operation Management

Reference no: EM132146273

Your manager has expressed worry about stocking out during order lead times. He has, up until now, just made sure to hold the average amount of inventory during lead time to cover expected demands. "I just can't figure it out," he says, "we're stocking out almost 50% of the time! That's crazy and our customers are unhappy. But I'm stocking the amount I expect to need, what's going wrong?" Calculate the additional amount of inventory that your manager needs to have at the beginning of lead time so that you only stock out 5% of the time. Data below: Demand is normally distributed, average of 500 units per day, standard deviation of 23 units per day. Lead time is 15 days Holding cost is 12% of cost of materials.

Reference no: EM132146273

Questions Cloud

What would you pay for an investment : What would you pay for an investment that pays you $5300000 after fifty years? Assume that the relevant interest rate for this type of investment is 8%

How can social development be established : How can educating help solve the health and poverty issues in Ethiopia, Africa?

What techniques and communication : What techniques and communication would you use when dealing with unresolved issues in your workplace and what follow up action would you take?

What are the medians for the two data sets : What are the medians for the two data sets? Is there a difference or similarity between the mean and the median? Explain the similarity or difference.

About stocking out during order lead times : Your manager has expressed worry about stocking out during order lead times.

Served in the military prior to being elected president : Do you believe that President, in order to effectively fulfill role as commander in chief, must have served in the military prior to being elected President.

Describe the procedures-guidelines used by hr : Describe the procedures/guidelines used by HR to conduct a job evaluation.

What is a professional organization you would like to join : What is a professional organization you would like to join? How can joining this organization benefit you in terms of networking?

Create a report to the management of the organisation : ICT501 Business Analysis and Systems Development Approaches - Identify a process that one of you has sufficient information about to succeed in undertaking

User Account

All Pages