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Suppose that the manager of a construction supply house determined from historical records that demand for sand averages 4 7 tons. In addition, suppose the
Suppose that the manager of a construction supply house determined from historical records that demand for sand averages tons. In addition, suppose the manager determined that demand during lead time could be described by a normal distribution that has a mean of and a standard deviation of tons. Answer the following questions assuming that the manager is willing to accept a stockout risk of no more than percent. Use Table B
Round your answer to two decimal points.
a What value of is appropriate?
ZValue
b How much safety stock should be held? Round your answer to two decimal points.
Safety Stock
c What reorder point should be used? Round your answer to two decimal points.
Reorder Point
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