Gainesville Cigar stocks Cuban cigars that have variablelead times because of the difficulty in importing the product:lead time is norma lly distributed with an average of 6 weeks anda standard deviation of 2 weeks. Demand is also a variable andnormally distributed with a mean of 200 cigars per week and astandard deviation of 25 cigars.a) For a 90% service level, what is the ROP?b) What is the ROP for a 95% service level?c) Explain what these two service levels mean. Which ispreferable?
Gainesville Cigar stocks Cuban cigars that have variablelead times because of the difficulty in importing the product:lead time is norma lly distributed with an average of 6 weeks anda standard deviation of 2 weeks. Demand is also a variable andnormally distributed with a mean of 200 cigars per week and astandard deviation of 25 cigars.a) For a 90% service level, what is the ROP?b) What is the ROP for a 95% service level?c) Explain what these two service levels mean. Which ispreferable?
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: lead time is norma lly distributed with an average of 6 weeks and a standard deviation of 2 weeks. Demand is also a variable and standard deviation of 25 cigars. a) For a 90% service level, what is the ROP? b) What is the ROP for a 95% service level? c) Explain what these two service levels mean. Which ispreferable? |
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