Answered: Weekly Average Demand 190 Standard…

Weekly Average Demand 190 Standard deviation of (weekly) demand 20 Setup cost ($) 1200 Lead time (in weeks) 2 Procurement cost ($) 350

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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Question

You are given the demand and inventory related information about a grocery store’s product in the table. The store is open for 49 weeks in a year. What is the reorder point if it wants to achieve a service level of 87%?

Weekly Average Demand
190
Standard deviation of (weekly) demand 20
Setup cost ($)
1200
Lead time (in weeks)
2
350
6
Procurement cost ($)
Holding cost /unit/week ($)

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