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Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 70 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 6. Ms. Flynn would like to maintain a 90% service level. Refer to the standard normal table for z-values. a) What safety stock level do you recommend for BX-5? Safety Stock =_____ units b) What is the appropriate reorder point? Reorder point = units

Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 70 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 6. Ms. Flynn would like to maintain a 90% service level. Refer to the standard normal table for z-values. a) What safety stock level do you recommend for BX-5? Safety Stock =_____ units b) What is the appropriate reorder point? Reorder point = units

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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**Maintaining Hospital Supplies: Calculating Safety Stock and Reorder Point for Bandage BX-5** Barbara Flynn is responsible for maintaining hospital supplies at General Hospital. Over the past year, the mean lead time demand for bandage BX-5 was 70 units, which was normally distributed. Furthermore, the standard deviation for BX-5 was 6 units. Ms. Flynn aims to maintain a 90% service level. Refer to the standard normal table for z-values. **a) What safety stock level do you recommend for BX-5?** Safety Stock = ___ units **b) What is the appropriate reorder point?** Reorder point = ___ units **Standard Normal Table for Z-values:** | Z | Pr(Z) | |------|-------| | 0.38 | 65 | | 0.50 | 69 | | 0.67 | 75 | | 0.84 | 80 | | 1.04 | 85 | | 1.28 | 90 | | 1.41 | 92 | | 1.56 | 94 | | 1.65 | 95 | | 1.75 | 96 | | 2.06 | 98 | | 2.33 | 99 | **Explanation of Graph/Diagram:** The table lists z-values and their corresponding probabilities (Pr(Z)) in a standard normal distribution. This helps determine the z-value associated with the desired service level. For example, a 90% service level corresponds to a z-value of 1.28. This value is used in calculating safety stock and reorder points to ensure that supply levels meet demand with the specified level of confidence.
Transcribed Image Text:**Maintaining Hospital Supplies: Calculating Safety Stock and Reorder Point for Bandage BX-5** Barbara Flynn is responsible for maintaining hospital supplies at General Hospital. Over the past year, the mean lead time demand for bandage BX-5 was 70 units, which was normally distributed. Furthermore, the standard deviation for BX-5 was 6 units. Ms. Flynn aims to maintain a 90% service level. Refer to the standard normal table for z-values. **a) What safety stock level do you recommend for BX-5?** Safety Stock = ___ units **b) What is the appropriate reorder point?** Reorder point = ___ units **Standard Normal Table for Z-values:** | Z | Pr(Z) | |------|-------| | 0.38 | 65 | | 0.50 | 69 | | 0.67 | 75 | | 0.84 | 80 | | 1.04 | 85 | | 1.28 | 90 | | 1.41 | 92 | | 1.56 | 94 | | 1.65 | 95 | | 1.75 | 96 | | 2.06 | 98 | | 2.33 | 99 | **Explanation of Graph/Diagram:** The table lists z-values and their corresponding probabilities (Pr(Z)) in a standard normal distribution. This helps determine the z-value associated with the desired service level. For example, a 90% service level corresponds to a z-value of 1.28. This value is used in calculating safety stock and reorder points to ensure that supply levels meet demand with the specified level of confidence.
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