Calculate the average inventory level

Assignment Help Operation Management

Reference no: EM132076216

Product A's inventory is controlled by a continuous review policy. Let us consider that the replenishment lead-time is 7 days. The weekly demand is normally distributed with mean 250 and standard deviation 64.55. Let us consider the optimal order quantity is 250 units.

1) If we set Re-order point R = 282. Calculate the service level?

2) Calculate the average inventory level?

3) How many stock-out cycles are expected per year? (Assume 350 days per year) and type 1 service level

4) What should the safety stock for a service level of 98%?

5) Suppose there two categories of customers X and Y. We promise a higher level of service to the X customers (e.g., 95% of demand is satisfied from stock); for Y customers, the service level would be lower, e.g., 85% of demand satisfied from stock. Describe in words how to manage the inventory to serve the two demand categories?

6) Modify your answer to Part A if it is known that the demand is uniformly distributed in [138.2, 361.8] that is it has the same mean and standard deviation.

Reference no: EM132076216

Questions Cloud

You work for firm that suffers severe economic decline : Assume that you work for a firm that suffers a severe economic decline. What behavioural practices might change?

In the organizational socialization process : In the organizational socialization process, which stage follows encounter?

Significant effect on protected health information : When it comes to health care entities there is a national background check, Do you think that this has a significant effect on Protected Health Information?

Calculate average inventory level : Calculate the base stock B to assure that the service level is 0.90? Calculate the average inventory level?

Calculate the average inventory level : If we set Re-order point R = 282. Calculate the service level? Calculate the average inventory level?

Different forms of individual pay for performance plans : Identify and explain different forms of individual pay for performance plans.

Waiting until after performance to read or hear criticism : What are the advantages of waiting until after a performance to read or hear criticism?

Complexity and dynamism of the world of business : Given the growing complexity and dynamism of the world of business, all organizations will have to ad opt some type of a matrix structure.

About solving the problem at springfield general : How might you have gone about solving the problem at Springfield General? To what extent, if any, would new technology have been helpful?

User Account

All Pages