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A bicycle manufacturer requires tires. Lead-time is known to be constant at three days. Inventory consumption is normally distributed with a mean of 500 tires
A bicycle manufacturer requires tires. Lead-time is known to be constant at three days. Inventory consumption is normally distributed with a mean of 500 tires per day and a standard deviation of 150 tires. If the manufactures wishes to avoid a stock out with probability P (z < +2.00) what should the reorder point be?
Formula is ROP = mean consumption time * lead time + Z (standard deviation)(sqrt lead time )
not sure how to use the formula
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