9. Suppose that the lead time for the distribution center in problem 8 can be 1, 2, or 3 weeks with these probabilities:

a. Simulate the amount of demand that occurs at the distribution center for 20 lead times by using the weekly demand distribution constructed in problem 8 and the information above. Use the two-digit column at the left of Appendix IV, starting at the top, to generate the length of the lead time. Use the two-digit column at the right of Appendix IV to select weekly demand values from the cumulative probability distribution developed in problem 8.

b. What amount of product should be on hand at the beginning of a lead time to provide a probability of 0.90 that stock will not run out?

Transcribed Image Text:

LEAD TIME (WEEKS) PROBABILITY 128 0.35 0.40 3 0.25