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Consider a periodic review system, where orders are placed every 20 days. The firm strives to provide a 94.18% cycle service level. Demand averages 425
Consider a periodic review system, where orders are placed every 20 days. The firm strives to provide a 94.18% cycle service level. Demand averages 425 units per day, and the standard deviation of demand per day is 108 units. Lead time is 12 days (round Z-values, standard deviations to two decimal places). a. How many units of safety stock should be held? units (round your response to the nearest integer). b. What should the target inventory level (order-up-to level) be? units (round your response to the nearest integer). c. Suppose that it is time to review the item. There are 168 units in inventory, and there is an outstanding backorder for 452 units. An order for 120 units is on the way. How many units should be ordered now? units (round your response to the nearest integer)
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