Inputs Average demand per unit time, D = Lead time, L= 300 SD of demand per unit time, oD = Target cycle service level 200 0.95 Distribution of Demand during Lead Time Mean demand during lead time, DL = SD of demand during lead time, oL = Output Safety inventory, ss = Reorder point, ROP =

Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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please answer all parts of the question within 30 minutes.
Weekly demand for Motorola cell phones at a Best Buy store is
normally distributed with a mean of 300 and a standard deviation of
200. Motorola takes two weeks to supply a Best Buy order. Best Buy
is targeting a cycle service level of 95 percent and monitors its
inventory continuously. How much safety inventory of cell phones
should Best Buy carry? What should their reorder point be?
Inputs
Average demand per unit time, D =
Lead time, L=
300
SD of demand per unit time, oD =
Target cycle service
200
0.95
vel
Distribution of Demand during Lead Time
Mean demand during lead time, DL =
SD of demand during lead time, oL =
Output
Safety inventory, ss D
Reorder point, ROP =
Transcribed Image Text:Weekly demand for Motorola cell phones at a Best Buy store is normally distributed with a mean of 300 and a standard deviation of 200. Motorola takes two weeks to supply a Best Buy order. Best Buy is targeting a cycle service level of 95 percent and monitors its inventory continuously. How much safety inventory of cell phones should Best Buy carry? What should their reorder point be? Inputs Average demand per unit time, D = Lead time, L= 300 SD of demand per unit time, oD = Target cycle service 200 0.95 vel Distribution of Demand during Lead Time Mean demand during lead time, DL = SD of demand during lead time, oL = Output Safety inventory, ss D Reorder point, ROP =
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