Question
The ToyWorld company produces toys out of plastic ordered from an outside supplier. ToyWorld's daily demand for plastic is normally distributed with a mean
The ToyWorld company produces toys out of plastic ordered from an outside supplier. ToyWorld's daily demand for plastic is normally distributed with a mean of 7,800 pounds and a standard deviation of 1,050 pounds. Lead time is 16 days. (Use the Formula Sheet Z table to determine Z values.) a. ToyWorld uses an average of pounds of plastic during the lead time. Find the average pounds of plastic. b. If ToyWorld uses a 70% service level, how much safety stock will be used? c. What is the reorder point if ToyWorld wants to limit the probability of a stockout to 8 percent? d. What is the service level if ToyWorld reorders when the plastic inventory reaches 134,586 pounds?
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Matching Supply with Demand An Introduction to Operations Management
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