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A sporting goods company has a distribution center that maintains inventory of fishing rods. The fishing rods have the following demand, lead time, and cost
A sporting goods company has a distribution center that maintains inventory of fishing rods. The fishing rods have
the following demand, lead time, and cost characteristics:
Average demand units per day, with a standard deviation of units
Average lead time days with a standard deviation of day
days per year in the business year
Unit cost $
Desired service level
Ordering cost $
Inventory carrying cost
a What is the standard deviation of demand during lead time?
b How many fishing rods should the distribution center carry to provide the desired service level?
c What is the EOQ?
d What is the average cycle stock?
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