What is the target inventory level

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Reference no: EM132952167

Tim Trojan runs a furniture store

One of his products is a maple desk. Weekly demand for maple desks follows a Normal distribution with mean 100 and standard deviation . Tim orders inventory replenishments weekly, and the lead-time from his supplier is weeks. He uses the fixed-time period model (periodic-review model) to decide his order quantities.

What is the target inventory level (TIL) (or base-stock level) for maple desks if Tim wants to maintain a service level of 98.5%? (Please specify all parameters you use for the calculation.)

If Tim has 250 units of the desk on-hand, how many maple desks should he order this week? (Please specify all parameters you use for the calculation.)

If the number of days between reviews increases (or T is bigger), the Target Inventory Level (TIL) (or Base Stock Level) will increase, decrease, or remain the same? Briefly explain.

Reference no: EM132952167

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