The daily usage rate of wheel bearings at a machine shop is normally distributed with a mean
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The daily usage rate of wheel bearings at a machine shop is normally distributed with a mean of 200 per day and a standard deviation of 15 per day. The lead time fluctuates in a normally distributed way and has a mean of 8 days and a standard deviation of 2 days:
1. If the machine shop wants to provide its customers with a 95% service level, what should the reorder point be?
2. If the lead time standard deviation increases to 4 days, what is the probability that the machine shop will run out of stock?
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Related Book For
Operations Management Managing Global Supply Chains
ISBN: 978-1506302935
1st edition
Authors: Ray R. Venkataraman, Jeffrey K. Pinto
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