Answered: An item has normally distributed demand…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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An item has normally distributed demand with mean 100 and standard deviation of 50. They order week with one week lead time. Backorders are allowed.

A) With an order-up-to level of 300, on-hand inventory of 200 and on-order inventory of 60, how much will be ordered this week?

B) What is the standard deviation of demand over 2 weeks?

C) If it uses 306 as its order-up-to level, what is its expected on-hand inventory?

D) Using part C data, what is nits expected on-order inventory?

E) If it uses 278 as its order-up-to level, what is its in-stock probability?

F) If it uses 334 as its order-up-to level, what is its stockout probability?

G) If it wants in-stock probability of 0.998, what order-up-to level should it use?

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.

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