The weekly demand for a product is 770 units. The standard deviation of daily demand is 10 units. The firm reviews its inventory every 28 days. Each order for the product arrives 9 days after placement. At the time of review, there are 10 units backorder. If 95 percent of all demand is to be satisfied from items in stock: a) How many units should be the safety stock? b) What’s the product’s inventory status? c) How many units should be ordered for this period?

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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The weekly demand for a product is 770 units. The standard deviation of daily
demand is 10 units. The firm reviews its inventory every 28 days. Each order for the product arrives 9 days after placement. At the time of review, there are 10 units backorder. If 95 percent of all demand is to be satisfied from items in stock:
a) How many units should be the safety stock?
b) What’s the product’s inventory status?
c) How many units should be ordered for this period?

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