Safety stock to prevent any inventory shortage

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Reference no: EM132111675

You would like to develop a pull production system in your shop floor. For one work center “ABC” producing small springs for a pen, the daily demand is 150 units. Whenever you order the raw material for this spring, you need to wait 6 days. One day, your boss asked how many bins of size 50 (a bin can store up to 50 springs) your department needs to carry for this process ABC. Based on historical analysis, your department keeps 10% safety stock to prevent any inventory shortage.

Reference no: EM132111675

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