What is the expected inventory level at the next review

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Reference no: EM133472150

Question: Dillo Mfg. builds an average of 20 compressors weekly, with standard deviation of 2 (assume normal distribution). Each compressor requires a drive belt. Drive belt inventory levels are reviewed every eight weeks and replenishment lead time is 3 weeks. Assume Dillo reviews their inventory and finds 100 belts on hand. Dillo uses a service level of 95% (i.e., Z=1.645). How many belts should they order? (Hint: this is a periodical review model, T=8.) What is the expected inventory level at the next review?

Reference no: EM133472150

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