Kelly’s Tavern serves Shamrock draft beer to its customers.The daily demand for beer is normally distributed, with anaverage of 20 gallons and a standard deviation of 4 gallons.The lead time required to receive an order of beer from thelocal distributor is 12 days. Determine the safety stock and reorder point if the restaurant wants to maintain a 90% ser-vice level. What would be the increase in the safety stock if a 95% service level were desired?
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Kelly’s Tavern serves Shamrock draft beer to its customers.
The daily demand for beer is
average of 20 gallons and a standard deviation of 4 gallons.
The lead time required to receive an order of beer from the
local distributor is 12 days. Determine the safety stock and
reorder point if the restaurant wants to maintain a 90% ser-
vice level. What would be the increase in the safety stock if
a 95% service level were desired?
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- The weed killer company uses 30 gallons (demand rate) of weed kill per day. The supply of weed kill is replenished when the amount on hand is 170 gallons (reorder point). After an order is placed, it takes about 4 days on average to receive the order. Safety stock is 50 gallons, which provides a stockout risk of 9.01%. What amount of safety stock would provide a stockout risk of 4.01%? Assume the lead time is distributed normally: therefore, the lead time will have a standard deviation that you need to initially solve for. Show all work.Thomas' Bike Shop stocks a high-volume item that has a normally distributed demand during lead time. The average daily demand is 100 units, the lead time is 4 days, and the standard deviation of demand of 20 units. What should the reorder point be to satisfy a 90% service level to Thomas? Suppose Thomas decides to cut back on safety stock by 40%, what would be his new service probability?. Skinner’s Fish Market buys fresh Boston bluefish daily for $4.20 per pound and sells it for $5.70per pound. At the end of each business day, any remaining bluefish is sold to a producer of catfood for $2.40 per pound. Daily demand can be approximated by a normal distribution with amean of 80 pounds and a standard deviation of 10 pounds. What is the optimal stocking level?
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