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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?

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
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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SOLVED FIXED TIME PERIOD MODEL PROBLEMS

Activities/Assessments:
Activity 13
• 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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