Question
Weekly demand for Motorola cell phones at Best Buy store is normally distributed, with a mean of 300 and standard deviation of 200. Motorola takes
Weekly demand for Motorola cell phones at Best Buy store is normally distributed, with a mean of 300 and standard deviation of 200. Motorola takes two weeks to supply a Best Buy order. Best Buy is targeting a CSL of 95 percent and monitors its inventory continuously.
a) How much safety inventory of cell phones should Best Buy carry? What should the ROP be?
b) Assume that the supply lead time from Motorola is normally distributed with mean of 2 weeks and standard deviation of 1.5 weeks. How will the safety stock and ROP change under new assumption?
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Introduction To Business Statistics
Authors: Ronald M. Weiers
7th Edition
978-0538452175, 538452196, 053845217X, 2900538452198, 978-1111524081
