Ned's Natural Foods sells unshelled peanuts by the pound. Historically, Ned has observed that daily demand is normally distributed with a mean of 80 pounds and a standard deviation of 26 pounds. Lead time also appears normally distributed with a mean of 8 days and a standard deviation of oL. Suppose one year has 365 days. The ordering cost is $600, and the inventory carrying cost is $1.2/pound/year. 1. Suppose o1, = 1 day and Ned aims to limit the stockout risk during lead time to 3.5 percent. At what level of inventory should the manager place an order?
Ned's Natural Foods sells unshelled peanuts by the pound. Historically, Ned has observed that daily demand is normally distributed with a mean of 80 pounds and a standard deviation of 26 pounds. Lead time also appears normally distributed with a mean of 8 days and a standard deviation of oL. Suppose one year has 365 days. The ordering cost is $600, and the inventory carrying cost is $1.2/pound/year. 1. Suppose o1, = 1 day and Ned aims to limit the stockout risk during lead time to 3.5 percent. At what level of inventory should the manager place an order?
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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![Ned's Natural Foods sells unshelled peanuts by the pound. Historically, Ned has observed that
daily demand is normally distributed with a mean of 80 pounds and a standard deviation of
26 pounds. Lead time also appears normally distributed with a mean of 8 days and a standard
deviation of o1. Suppose one year has 365 days. The ordering cost is $600, and the inventory
carrying cost is $1.2/pound/year.
1.
Suppose oL =
1 day and Ned aims to limit the stockout risk during lead time
to 3.5 percent. At what level of inventory should the manager place an order?
2.
Suppose Ned uses a reorder point of 900 pounds and the service level is 88.1
percent. Then what is the standard deviation of lead time (oL)?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8dfdd241-eafd-431f-ae42-be2ebf1fd25d%2F3f907907-60c0-4fd3-a597-547504c4e7a7%2Ftasoju_processed.png&w=3840&q=75)
Transcribed Image Text:Ned's Natural Foods sells unshelled peanuts by the pound. Historically, Ned has observed that
daily demand is normally distributed with a mean of 80 pounds and a standard deviation of
26 pounds. Lead time also appears normally distributed with a mean of 8 days and a standard
deviation of o1. Suppose one year has 365 days. The ordering cost is $600, and the inventory
carrying cost is $1.2/pound/year.
1.
Suppose oL =
1 day and Ned aims to limit the stockout risk during lead time
to 3.5 percent. At what level of inventory should the manager place an order?
2.
Suppose Ned uses a reorder point of 900 pounds and the service level is 88.1
percent. Then what is the standard deviation of lead time (oL)?
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