Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

A shop owner uses a reorder point approach to restocking a certain raw material. Lead time is 1 0 days. Usage of the material is

A shop owner uses a reorder point approach to restocking a certain raw material. Lead time is
10 days. Usage of the material is normally distributed with a mean of 80 pounds per day and a
daily standard deviation of 8 pounds. When should the raw material be reordered if the
acceptable risk of a stockout is 2%(Customer service level is 98%)?(Hint: You need to
calculate the standard deviation during the lead time)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these General Management questions