LSCM 360 - Exam 2 Practice Problems Answer Key

# LSCM 360 - Exam 2 Practice Problems Answer Key - Practice...

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Practice Problems for Exam 2 1. Jim manages inventory of corn chips, but he struggles with inventory levels and stock outs. He hires a consultant, Martens Consulting, LLC, to help him think through his inventory a bit more. Lead time for the past 12 months in days has been 3, 3, 9, 1, 14, and 10. Standard deviation (sigma) of lead time is 5.08. Average daily demand for the last 365 days has been 140 bags, and the standard deviation of daily demand is 30. a. If Jim wants to have bag with 99% certainty, how many bags should Jim have in inventory when he places an order? ~3078 What Jim wants bags with 95% certainty, how many bags should he have in inventory when he places an order? ~2363 b. Martens Consulting wants to show Jim how important it is to work with reliable and consistent supply chain partners, so they show Jim how many bags are needed to maintain 95 and 99% certainty if lead time (in days) for the past 6 months were 3, 5, 3, 2, 5, & 5 (standard deviation of lead time is 1.3).

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