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1 INVENTORY PLANNING DATA PROBLEM 1 Caryngchange Rate 12.0% of unt cost Aunt morth Litely Corporation sells 1,350 of its special decorator light switch per year, and places orders for 300 of these switches at a time StockoutCost Fada 100 ofuntoostunut Stockout Assuming no safety stocks, Litely estimates a 50% chance of no shortages in each cycle, and the probability of shortages of 5, 10, and 15 units as 0.2, 0.15, and0.15 Item Number R100501 RW12050 FP300 FP400 10 respectively. Unit Cost $1.500 $1,200 $800 $500 current Inventory Level 100 100 75 100 The carrying cost per unit per year is calculatedas$5 and the stock-out cost is 13 estimated at $6 ($3 lost profit per switch and another $3 lost in goodwill, or future 14 ndard Dev, of WeddyDemand 20 15 sales loss Standard Dew. DOLT 35 14 21 16 17 18 BASIC E00 MODEL Order 167 167 125 171 19 What level of safety stock should Litely use for this product? (Consider safety Reader Part 200 160 60 70 20 Safety stock of 0, 5, 10, and 15 units) TA a 22 $30,000 $24,000 S12.000 $10,247 23 24 SAFETY STOCK MODEL PROBLEM 2 Onde 167 167 125 171 25 26 105 Presume that Litely carries a modern white kitchen ceiling lamp that is quite popular. Safety Stock 27 28 The anticipated demand during lead time can be approximated by a normal curve 29 30 da Sidat Cod 32 32160 20 3200 having a mean of 180 units and a standard deviation of 40 units TANC Tota SO Cost $40,980 $34,512 $14, 28 $12,547 32 What safety stock should Litely carry to achieve a 95% service level? 33 COSTAS A FUNCTION OF CUSTOMER SERVICE LEVEL 314528 $12547 34 $40,980 $34,512 35 456 314672 412527 36 800.0 $48.420 $39 37 95.09 $40,980 $34. $14.28 $12547 38 241,100 334 $14752 $12807 39 424501 3602 315248 $1327 40 999% ss5860 $39552 $16128 $14.147 42 43 FACTORSNEEDED TO FIND NUMBEROF STOCKOUTS 44 50 03 89 80.0% 01118 45 46 47 48 49 999% l 0.0003 50