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Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). $ 85 Ordering cost Service probability Lead time Annual demand 3,080 mufflers per order Standard deviation of daily demand 6 mufflers per working day 92 % $35.00 working days per muffler % of item value working days Item cost 2 Working days Annual holding cost Review period 37 280 per year 23 a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Optimal target level

Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). $ 85 Ordering cost Service probability Lead time Annual demand 3,080 mufflers per order Standard deviation of daily demand 6 mufflers per working day 92 % $35.00 working days per muffler % of item value working days Item cost 2 Working days Annual holding cost Review period 37 280 per year 23 a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Optimal target level

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.4: Distributions Of Data
Problem 19PFA
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Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). $ 85 Ordering cost Service probability Annual demand 3,080 mufflers per order Standard deviation of daily demand mufflers per working day 92 % per muffler % of item value Item cost $35.00 Lead time 2 working days Annual holding cost Review period 37 Working days 280 per year 23 working days a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Optimal target level b. If the service probability requirement is 91 percent, the optimal target level will: Decrease O Increase O Stay the same
Transcribed Image Text:Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). $ 85 Ordering cost Service probability Annual demand 3,080 mufflers per order Standard deviation of daily demand mufflers per working day 92 % per muffler % of item value Item cost $35.00 Lead time 2 working days Annual holding cost Review period 37 Working days 280 per year 23 working days a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Optimal target level b. If the service probability requirement is 91 percent, the optimal target level will: Decrease O Increase O Stay the same
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