Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Annual demand for a product is 10,400 units; weekly demand is 200 units with a standard deviation of 75 units. The cost of placing an

image text in transcribed Annual demand for a product is 10,400 units; weekly demand is 200 units with a standard deviation of 75 units. The cost of placing an order is $100, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.50 per unit. a. To provide a 98 percent service probability, what must the reorder point be? (Use Excel's NORMSINV() function to find the correct critical value for the given -level. Do not round intermediate calculations. Round " z " value to 2 decimal places and final answer to the nearest whole number.) b. Suppose the production manager is told to reduce the safety stock of this item by 110 units. If this is done, what will the new service probability be? (Use Excel's NORMSDIST() function to find the correct probability for your computed Z-value. Round your answer to the nearest whole number.)

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