Question
Daily demand for cat litter at the Cat Caf in Jones is 1500 ounces with a standard deviation of 300 ounces. The proprietor orders the
Daily demand for cat litter at the Cat Caf in Jones is 1500 ounces with a standard deviation of 300 ounces. The proprietor orders the best cat litter money can buy online, and the average shipping time is 5 days. Of course, if the order is placed at the end of the week, then it may take a while longer to receive the shipment, so the standard deviation of lead time is 2 days. The state health department keeps a close eye on the condition of the Cat Caf; a cat-loving inspector visits at least twice a week, ostensibly to inspect, but mostly to pet his favorite Scottish Fold cat named Groundskeeper Willie.
Suppose the caf wishes to erase any hint of impropriety and wants to peg their service level at 99%. How many ounces of safety inventory they should carry? What is the reorder point?
Suppose the caf wishes to carry 8 days of demand as their safety inventory. What service level would they achieve?
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