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The following applies to Questions 12 -14: ACME has been having inventory management problems with one of their major components. They have been relying on
The following applies to Questions 12 -14: ACME has been having inventory management problems with one of their major components. They have been relying on the experience of their purchasing commodity manager to manage the inventory. The Senior Vice President has decided to implement a simple "Q, R "system based on a Continuous Review Policy. The Average demand per week is 90 units with a standard deviation of 30 units, and it takes 16 weeks from order to replenishment from the supplier. The Senior Vice President wants a Service level of 98% for this component - in other words, she is willing to accept stockouts for only 2% of the time. The relevant z-table information is given below: What is the Re-Order Level (R)? - (if required, round it to the next highest round number) 1046 1696 1854 1265 2154
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