Answered: A manufacturing company Glass Items…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Related questions

Question

QUESTION 2
a. A manufacturing company Glass Items Manufacturing Limited (GIM), operating under a
continuous review system, has an average demand of 150 units per week for the item it produces.
The standard deviation in weekly demand is 30 units. The lead-time for the item is seven weeks,
and it costs the company $70 to process each order. The holding cost for each unit is $30 per year.
The company operates 52 weeks per year.
A normal distribution table is appended to this assignment.

(i) Use the information in 2 a. above. What is the desired safety stock level, if the company has a
policy of maintaining a 98% cycle-service level?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

Expert Solution