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The hardware Warehouse is evaluating the safety stock policy for all its items. For SKU A3510, the company always order 80 units each time an order is placed. The daily demand is normally distributed, with a mean of 12 units and a standard deviation of 4. It always takes exactly five days for an order of this item to arrive. Due to the large sale volume, a 99 % service level is to be maintained. a) What is the standard deviation of demand during the lead time? b) How much safety stock should be carried? c) What should be the reorder point?

The hardware Warehouse is evaluating the safety stock policy for all its items. For SKU A3510, the company always order 80 units each time an order is placed. The daily demand is normally distributed, with a mean of 12 units and a standard deviation of 4. It always takes exactly five days for an order of this item to arrive. Due to the large sale volume, a 99 % service level is to be maintained. a) What is the standard deviation of demand during the lead time? b) How much safety stock should be carried? c) What should be the reorder point?

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
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The hardware Warehouse is evaluating the safety stock policy for all its items. For SKU A3510, the company always order 80 units each time an order is placed. The daily demand is normally distributed, with a mean of 12 units and a standard deviation of 4. It always takes exactly five days for an order of this item to arrive. Due to the large sale volume, a 99 % service level is to be maintained. a) What is the standard deviation of demand during the lead time? b) How much safety stock should be carried? c) What should be the reorder point?
Transcribed Image Text:The hardware Warehouse is evaluating the safety stock policy for all its items. For SKU A3510, the company always order 80 units each time an order is placed. The daily demand is normally distributed, with a mean of 12 units and a standard deviation of 4. It always takes exactly five days for an order of this item to arrive. Due to the large sale volume, a 99 % service level is to be maintained. a) What is the standard deviation of demand during the lead time? b) How much safety stock should be carried? c) What should be the reorder point?
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