Operations Management (McGraw-Hill Series in Operations and Decision Sciences)
12th Edition
ISBN: 9780078024108
Author: William J Stevenson
Publisher: McGraw-Hill Education
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Chapter 13, Problem 19P
Given this information:
Expected demand during lead time = 300 units
Standard deviation of lead time demand = 30 units
Determine each of the following, assuming that lead time demand is distributed normally:
a. The ROP that will provide a risk of stockout of 1 percent during lead time.
b. The safety stock needed to attain a 1 percent risk of stockout during lead time.
c. Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk? Explain. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percent instead of 1 percent? Explain.
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Given this information:
Given this information:Expected demand during lead time = 300 unitsStandard deviation of lead time demand = 30 unitsDetermine each of the following, assuming that lead time demand is distributed normally:a. The ROP that will provide a risk of stockout of 1 percent during lead time.b. The safety stock needed to attain a 1 percent risk of stockout during lead time.c. Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk?Explain. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percentinstead of 1 percent? Explain.
2) Daily demand for a product is normally distributed with a mean of 100 and a standard deviation of 12.
The lead time is normally distributed with a mean of 5 days and a standard deviation of 1.5 days.
a) What is the ROP to satisfy a %90 probability of not stocking out?
b) What is the safety stock?
c) What is the probability of stocking out if the manager has decided not to keep any safety stock?
What is the Z value, and what is the probability?
Chapter 13 Solutions
Operations Management (McGraw-Hill Series in Operations and Decision Sciences)
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- Chris usually sells 120 copies of newspaper each day and believe that sale are normally distributed, with a standard deviation of 15 papers. He pays 70 cents for each paper, which sells $1.25. For each unsold paper, he receives 30-cent credit. a) determine how many papers he should order each day b) calculate the stockout risk for that quantity.arrow_forwardA retailer uses a periodic review order-up-to model to control the inventory of one of its high volume products. Average demand is 2580 units per week with a standard deviation of 1270. The review period is 5 weeks, the lead time is 11 weeks, and the safety factor used is 0.61. How many stockouts should the retailer expect for this product next year?arrow_forwardThe amount of denim used daily by the Southwest ApparelCompany in its manufacturing process to make jeans isnormally distributed with an average of 4000 yards ofdenim and a standard deviation of 600 yards. The lead timerequired to receive an order of denim from the textile mill is a constant 7 days. Determine the safety stock and re-order point if the company wants to limit the probability of a stockout and work stoppage to 5%.arrow_forward
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