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Question: Jennings Assembly in Hartford, Connecticut, uses a component supplied by a company in Brazil. The component is expensive to carry in inventory and consequently is not always available in stock when requested. Furthermore, shipping schedules are such that the lead time for transportation of the component is not a constant. Using historical records, the manufacturing firm has developed the following probability distribution for the product's lead time. The distribution is shown here, where the random variable x is the number of days between the placement of the replenishment order and the receipt of the item.
x P(x)
2 0.15
3 0.45
4 0.30
5 0.075
6 0.025
a. What is the average lead time for the component?
b. What is the coefficient of variation for delivery lead time?
c. How might the manufacturing firm in the United States use this information?
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