Question
A car dealer in KC specializes in selling cars from a Japanese manufacturer. The manufacturer is launching a new model in 2021 and any order
A car dealer in KC specializes in selling cars from a Japanese manufacturer. The manufacturer is launching a new model in 2021 and any order for this model placed by the dealer is fulfilled after a leadtime of 1 month. The dealer forecasts that the monthly demand for this new model will be Normally distributed with a mean of 20 and a standard deviation of 10, and wishes to maintain a service level of 0.75. 22. What base-stock level should the dealer choose to achieve a service level of 0.75? If your answer is not an integer, provide at least three decimal places, e.g., 7.500
A car dealer in KC specializes in selling cars from a Japanese manufacturer. The manufacturer is launching a new model in 2021 and any order for this model placed by the dealer is fulfilled after a leadtime of 1 month. The dealer forecasts that the monthly demand for this new model will be Normally distributed with a mean of 20 and a standard deviation of 10, and wishes to maintain a service level of 0.75. 22. What base-stock level should the dealer choose to achieve a service level of 0.75? If your answer is not an integer, provide at least three decimal places, e.g., 7.500. 23. If the dealer increases the service level from 0.75 to 0.80, how will the average on-order (pipeline) inventory change? a. Remains the same b. Increases c. Decreases d. Not enough information 24. If the dealer increases the service level from 0.75 to 0.80, how will the average net inventory change? a. Remains the same b. Increases c. Decreases d. Not enough information 25. Suppose the dealer owns n car dealerships (including the one mentioned above) in the KC metropolitan area. The monthly demand for this model at each of these dealerships is also Normally distributed with a mean of 20 and a standard deviation of 10. All units of this model are stored in a central warehouse and can be shipped to any of the dealerships immediately at no additional cost. The order leadtime for the warehouse is also 1 month. Suppose the dealer has chosen a base-stock level for the central warehouse such that 75% of the total customer demand for this model across all n dealerships can be satisfied immediately from stock. If your calculated base stock level in Question 22 is s', then the base-stock level for the warehouse, a. is equal to ns* b. is greater than ns c. is less than ns d. can not be determined from the given information
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