Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Thomas Built Buses (TBB) manufacturers yellow school buses at its facility in High Point, NC. TBB orders its windshields from a specialty vehicle glass
Thomas Built Buses (TBB) manufacturers yellow school buses at its facility in High Point, NC. TBB orders its windshields from a specialty vehicle glass supplier. Weekly requirements for the windshields are normally distributed with a mean of 196 units/week and standard deviation of 94 units/week. Lately, the supplier has been unreliable with its deliveries. TBB estimates the lead time is normally distributed with mean 5 weeks and standard deviation 3 weeks. TBB orders the windshields at a unit cost of $2773. The annual cost of carrying inventory at the plant is 19% of the purchase cost per unit per year. TBB reviews its windshield inventory continuously. Assume 52 weeks/year, 7 days/week, and 364 days/year. Compute the safety stock needed to maintain a service level of 92%. Carry calculations to at least 3 decimal places. Round your answer to the nearest tenth of a unit (one decimal place). A table of z-values is provided for your reference. Service Level z value 0.9 1.282 0.91 1.341 0.92 1.405 0.93 1.476 0.94 1.555 0.95 1.645 0.96 1.751 0.97 1.881 0.98 2.054 0.99 2.326
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started