Asked by Gwyneth Paulino on Jun 19, 2024
Verified
Average daily demand for a product is normally distributed with a mean of 20 units and a standard deviation of 3 units. Lead time is fixed at 25 days. What reorder point provides for a service level of 95%?
Service Level
A measure of the quality of service provided, often evaluated in terms of speed, reliability, and customer satisfaction.
Lead Time
The amount of time it takes from the initiation of a process until its completion, including the time taken for preparation, processing, and delivery.
Standard Deviation
A statistical measure of the dispersion or variation in a set of values, indicating how much the values diverge from the average of the set.
- Master the concepts and mathematics involved in identifying optimum safety stock quantities and reorder thresholds in response to demand fluctuations and targeted service standards.
Verified Answer
MV
Maryam VahdatiJun 20, 2024
Final Answer :
ROP = D ∙ L + z ∙ σd ∙ LT\sqrt { L T }LT = 20 ∙ 25 + 1.65 ∙ 3 ∙ 25\sqrt { 25 }25 = 500 + 24.75
Learning Objectives
- Master the concepts and mathematics involved in identifying optimum safety stock quantities and reorder thresholds in response to demand fluctuations and targeted service standards.