Find the reorder point necessary to provide a 99 percent service probability.

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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The annual demand for a product is 14,700 units. The weekly demand is 283 units with a standard deviation of 80 units. The cost to place an order is $33.00, and the time from ordering to receipt is eight weeks. The annual inventory carrying cost is $0.20 per unit. a. Find the reorder point necessary to provide a 99 percent service probability.

Note: Use Excel's NORM.S.INVI function to find the z value. Round z value to 2 decimal places.

 

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can you also answer this with the information from the same question?
b. Suppose the production manager is asked to reduce the safety stock of this item by 60 percent. If she does so, what will the new service probability be?

Note: Use Excel's NORM.S.DIST( function to find the correct probability for your computed z value. Round "z" value to 2 decimal places and final answer to 1 decimal place.

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