# Advanced Inventory Inclass Problems.pptx - Statistical...

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Statistical Reorder Point example

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Question What is the new safety stock in the problem above change if the probability of a stock out falls to 1%? Average demand during LT = 550 Std. dev = 40 P(stock out) = 1% Z = 2.33 A = 93 B = 66 C = 78 D = 86
Question Calculate the statistical ROP for the following: Demand is normally distributed with average demand during lead time of 500 and the standard deviation of demand during lead time = 50. Assume a service level of 95% (z=1.65) A. 82 B. 582 C. 500

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Question If I desire the chance of a stock out decreases, then the statistical ROP will: A. Increase B. Decrease C. Stay the same D. Cannot be determined
Question When using the Quantity Discount Model, if the EOQ on the TAIC curve with the lowest price is feasible, it is the optimal order quantity. A. True B. False

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Question

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• Spring '14
• Management, 1%, \$4, 20%, TAIC

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