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Use the data below to answer the question below. Average daily dernand 325 cases per day Standard deviation of daily demand 95 cases per day Average Lead Time Inventory holding cost Purchase Price Order Cost Stockout Cost Desired Service Level Assume the company operates 365 days per year 2 days (constant) 20% of the item's value per year $50 per case $10 per order $35 per case 80% What should the level of safety stock be for this item to meet the desired service level assuming lead time is always 2 days and the z-score for a service level of 80% is 0.84?

Use the data below to answer the question below. Average daily dernand 325 cases per day Standard deviation of daily demand 95 cases per day Average Lead Time Inventory holding cost Purchase Price Order Cost Stockout Cost Desired Service Level Assume the company operates 365 days per year 2 days (constant) 20% of the item's value per year $50 per case $10 per order $35 per case 80% What should the level of safety stock be for this item to meet the desired service level assuming lead time is always 2 days and the z-score for a service level of 80% is 0.84?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use the data below to answer the question below. Average daily dernand 325 cases per day Standard deviation of daily demand 95 cases per day Average Lead Time Inventory holding cost Purchase Price Order Cost Stockout Cost Desired Service Level Assume the company operates 365 days per year 2 days (constant) 20% of the item's value per year $50 per case $10 per order $35 per case 80% What should the level of safety stock be for this item to meet the desired service level assuming lead time is always 2 days and the z-score for a service level of 80% is 0.84?
Transcribed Image Text:Use the data below to answer the question below. Average daily dernand 325 cases per day Standard deviation of daily demand 95 cases per day Average Lead Time Inventory holding cost Purchase Price Order Cost Stockout Cost Desired Service Level Assume the company operates 365 days per year 2 days (constant) 20% of the item's value per year $50 per case $10 per order $35 per case 80% What should the level of safety stock be for this item to meet the desired service level assuming lead time is always 2 days and the z-score for a service level of 80% is 0.84?
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