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The Diaz company lays cable for a number of utilities. The company's daily demand for cable is normally distributed with a mean of 1270 feet
The Diaz company lays cable for a number of utilities. The company's daily demand for cable is normally distributed with a mean of 1270 feet and a standard deviation of 380 feet. When cable is ordered from the supplier, it requires 9 days to arrive. 1. Diaz uses an average of feet of cable during the lead time. 2. If Diaz uses a 70% service level, how much safety stock will be used? 3. To provide a 90% Service Level, the Reorder Point must be standard deviations to the right of the mean of the Demand During Lead Time distribution. 4. What is the reorder point if Diaz wants to limit the probability of a stockout to 8 percent? 5. What is the service level if Diaz reorders when the cable inventory reaches 14,000 feet? 6. If Diaz provides an 18% Service Level, the Reorder Point will be to the of the mean of the Demand During Lead Time distribution. a. left b. right
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