Service probability-what must the reorder point be

Assignment Help Operation Management

Reference no: EM131699188

Annual demand for a product is 15,080 units; weekly demand is 290 units with a standard deviation of 80 units. The cost of placing an order is $105, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.90 per unit.

a. To provide a 99 percent service probability, what must the reorder point be? (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.)

Reorder point units

b. Suppose the production manager is told to reduce the safety stock of this item by 70 units. If this is done, what will the new service probability be? (Use Excel's NORMSDIST() function to find the correct probability for your computed Z-value. Round your answer to the nearest whole number.)

Service probability %

Reference no: EM131699188

Questions Cloud

Discuss gathering or horticultural and pastoral societies : From the e-Activity, explain what either Lenski or Durkheim would say about the technology's impact of society

Evaluate the diameter of a piston rod of aisi : Compute the required diameter of a piston rod of AISI 1040 hot-rolled steel with a length of 20 in. The rod is subjected to an axial compressive load of 6000.

How many units should be ordered : Daily demand for a product is 95 units with a standard deviation of 14 units. The review period is 7 days, how many units should be ordered?

Equations using laplace transform : For a RC circuit, we can use Laplace transforms to show that when we apply a step input of 5V, the voltage across the capacitor rises exponentially

Service probability-what must the reorder point be : To provide a 99 percent service probability, what must the reorder point be?

Compute the required diameter of an air cylinder piston rod : Compute the required diameter of an air cylinder piston rod of AISI 1040 hot-rolled steel. The rod has a length of 54 in. and is subjected to an axial.

Describe some of the disadvantages that freed slaves : Describe some of the disadvantages that freed slaves had as they tried to blend into mainstream society

Compute the total cost of the becker pool : Compute the total cost of the Becker pool as shown on the job cost sheet at date of completion

Compute the required diameter of a steel rod : Compute the required diameter of a steel rod of AISI 1050 cold-drawn steel with a yield stress of 85,000 psi and a length of 8 ft.

User Account

All Pages