The fraction of demand met from inventory

Reference no: EM13257090

A company tries to reduce all lead-times by 50 percent. There is a discussion concerning the impact of this change. As an example, an item in stock is considered. Demand is continuous and normally distributed. Inventory control is carried out by a (Q,r) policy with continuous review. The demand per week has mean 200 and standard deviation 50. Demands during different weeks are independent. Currently, the lead-time is four weeks and r=850 and Q = 600. Two questions have been raised.

a. What is the current fill rate (i.e., the fraction of demand met from inventory)?

b. Assume that the lead-time is reduced to two weeks, while r and Q are unchanged. What is the fill rate? Note: Whenever needed, use the following approximation for the fill rate:

Reference no: EM13257090

Questions Cloud

What do each of you understand the term law : Students each of you have an opinion of what the 'law' is or what function the 'law' plays in everyday society. What do each of you understand the term 'law' to be and what do you think the functions of the 'law' are?

Explain what is the empirical formula of a sample : What is the empirical formula of a 0.01510 g sample gives 0.01102 g of H2O and 0.04484 g of CO2 on combustion? b) if you dissolve 1.000 g of the powder in 100.000 g of camphor, you find that the melting point of the solution is 177.05 C. Pure camp..

Financial reporting standard problem : Indicate the Financial Reporting Standard applicable on joint ventures. Summarize the important features of that specific FRS.

Why is there a cost of retained earnings : Equity can be raised in two ways; by retaining some of the current year's earnings and by issuing common stock. Please explain.

The fraction of demand met from inventory : A company tries to reduce all lead-times by 50 percent. There is a discussion concerning the impact of this change. As an example, an item in stock is considered.

Visualize a history using the web-based tool : VISUALIZE A HISTORY using the web-based tool - Choose a historical phenomenon within a roughly 10-year period, e.g., Cuban cinema 1965-75 or American documentary film 1960-1970, or French New Wave cinema 1959-1969, or Marxist film theory 1950-1960..

Written request for a termination statement : Billy Bob repays his debt, incurred to buy consumer goods, to Appliance Finance Bank and immediately files a written request for a termination statement. Appliance Finance

Should governmental regulations be placed on companies : Should governmental regulations be placed on companies' claims that their products are green? Should official classification for environmental friendliness be defined

Find the water temperature after half an hour : When resting, a person has a metabolic rate of about 3.0 105 joules per hour. The person is submerged neck-deep into a tub containing 1.12 103 kg of water at 22.10Â° C. find the water temperature after half an hour

User Account

All Pages