If the stock level for a SKU is currently 30 days worth and management decides toincrease safety stock on the SKU from 14 days to 21 days, the resulting averagestock level will be approximately37 days23 days33.5 days51 days

Safety Stock is the amount of inventory held to protect against stockouts due to demand variability…

Answered: If the stock level for a SKU is…

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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Similar questions

Which of the following statements about the basic EOQ model is Ture? If the holding cost were to increase, the EOQ would reduce. If the ordering cost were to decrease, the EOQ would increase. If annual demand were to double, the EOQ would also double. If annual demand were to increase, the EOQ would reduce.
A demand driven model will likely lead to higher inventory levels due to safety stock. True False
Gyona purchases meat from the local supermarket at $5 per kilo and sell it at $9 per kilo. any unsold meat is sold to the Chinese restaurant near by at $2 per kilo. Gyona is sure that the demand follows a normal distribution with a mean of 100 kilograms and a standard deviation of 15 kilograms. - How many kilograms should she order each day?
You have the data on the application during the 6 consecutive years below Requirement / Find the expected demand for the year 2008 using the simple moving average method The basis of three periods of time the years 2002 2003 2004 2005 2006 2007 2008 Order quantity 10 20 30 40 50 60
1
Daily demand for a product is 10 units. The standard deviation of demand during the review and lead time is 20 units. The review period is 30 days and the lead time is 14 days. At the time of review there are 150 units in stock. If the probability of stockout should not exceed 2%, how many units should be ordered?
Inventory order is placed when O a. Only when projected or actual stocks on hand is below zero O b. None of these O c. Only when projected or actual on hand stocks are higher than the safety stock. O d. Only when projected or actual on hand stocks value is positive.
With a normal demand and normal lead-time, increasing the order lead-time results in which of the following? Lower expected costs. Higher service levels. Higher stockout probability. All of the above.
Which of the following is one of the assumptions of EOQ model? Group of answer choices Annual demand is known and even throughout the year Orders are received partially There are quantity discounts Multiple items are involved Lead time varies
The daily demand for printer paper at the School of Business is approximately normal with a mean of 15.2 boxes and a standard deviation of 1.6 per day. The Administrative Assistant reviews the inventory every 30 days, and the lead time is 5 days. The division set a policy of satisfying 96% of the demand for paper. If there are 125 boxes of printer paper in inventory at the beginning of this review period, how many boxes of printer paper should be ordered? What is the variance of demand during the review period plus the lead-time period? What is the standard deviation of demand during the review period plus the lead-time period? A. Variance = 76.80 Standard deviation = 8.76 B. Variance = 89.60 Standard deviation = 9.47 C. Variance = 9.47 Standard deviation = 89.60 D. Variance = 12.8 Standard deviation = 3.58
ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings. A True B False
Ross White’s machine shop uses 2500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. Upon hearing that Ross White is considering the producing the brackets in-house, the supplier has notified Ross that the purchase price would drop from $15 per bracket to $14.50 per bracket if Ross purchase the brackets in lots of 1000. After analyzing the cost of the various options for obtaining the brackets, Ross White recognizes that although he knows the lead time is 2 days, the average daily demand usually varies. Ross has kept careful records and has determined that the average daily demand is normally distributed with a standard deviation of 2.5 units. If Ross would like to maintain a service level of 90 %,…

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If the stock level for a SKU is currently 30 days worth and management decides to increase safety stock on the SKU from 14 days to 21 days, the resulting average stock level will be approximately 37 days 23 days 33.5 days 51 days