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Weekly demand for wheelchairs at a Walgreens warehouse is normally distributed with a mean of 566 units per week and a standard deviation of 107
Weekly demand for wheelchairs at a Walgreens warehouse is normally distributed with a mean of 566 units per week and a standard deviation of 107 units per week. Walgreens orders the wheelchairs from Medline at a cost of $200 per unit and the holding cost is 24% of the purchase cost per unit per year. Walgreens would like to maintain a 98% cycle service level for its wheelchairs. Suppose that Walgreens reviews its inventory every 7 week(s) and that lead times for orders placed with Medline are constant at 4 week(s). Compute the base stock level required to meet the desired service level for Walgreens. Rounding instructions: Carry calculations to at least 3 decimal places. Round your answer to the nearest tenth of a dollar (one decimal place)
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