Distributors in terms of stock availability

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Reference no: EM132172349

R Electronics Corp produces a 4-week supply of its Hard Disk Drive(HDD) model when stock on hand drops to 500 units. It takes 1 week to produce a batch of this HDD model. Factory orders average 400 units per week, and the standard deviation of the demand distribution is estimated at 125 units. Notes: You will need to refer to z-table

a) What level of customer service is R Electronics providing to its distributors in terms of stock availability?

b) R Electronics wants to improve customer service up to 90%

1. What is the new safety stock?

2. How will such an improvement affect the company's Reorder policy (New ROP)?

Reference no: EM132172349

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