Question
To accommodate uncertainties in delivery and the customer demand, the manager wants to hold the inventory for 2 weeks ( L s ) of demand
To accommodate uncertainties in delivery and the customer demand, the manager wants to hold the inventory for 2 weeks (Ls) of demand as a safety stock (SS).
What should be the reorder point (ROP) considering the delivery lead time (L) is 1 week from the West Coast to the East Coast?
ROP = D L + SS L = 1 week = 1/52
Given, SS = D Ls Ls = 2 weeks = 2/52
[Note: Due to many other products in the promotion, the manager wants to set a periodic inventory control system to review the inventory needs. This will help to reduce the stockout risks.]
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Mathematical Applications for the Management Life and Social Sciences
Authors: Ronald J. Harshbarger, James J. Reynolds
11th edition
9781337032247, 9781305465183, 1305108043, 1337032247, 1305465180, 978-1305108042
