Estimate the stockout risk if the target service level is 0.89. (Enter a number with two decimal places, e.g. 0.12)

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...
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Demand is Normally distributed with mean of 14 per
week and a weekly variance of 3. The ordering cost is
$81.84. Lead time is 5 weeks. Shortages cost an
estimated $1.12 per unit short to expedite orders to
appease customers. The holding cost is $5.07 per
week.
Estimate the stockout risk if the target service level is
0.89. (Enter a number with two decimal places, e.g.
0.12)
Transcribed Image Text:Demand is Normally distributed with mean of 14 per week and a weekly variance of 3. The ordering cost is $81.84. Lead time is 5 weeks. Shortages cost an estimated $1.12 per unit short to expedite orders to appease customers. The holding cost is $5.07 per week. Estimate the stockout risk if the target service level is 0.89. (Enter a number with two decimal places, e.g. 0.12)
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