Annual demand for a product is 8,840 units; weekly demand is 170 units with a standard deviation of 65 units. The cost of placing an order is $90, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.90 per unit. Suppose the production manager is told to reduce the safety stock of this item by 125 units. If this is done, what will the new service probability be?

Annual demand for a product is 8,840 units; weekly demand is 170 units with a standard deviation of 65 units. The cost of placing an order is $90, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.90 per unit. Suppose the production manager is told to reduce the safety stock of this item by 125 units. If this is done, what will the new service probability be?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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