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Unformatted text preview: $2 per tire, and the ﬁxed ordering cost is $30 per order. Suppose the distributor is intended to achieve a 1 service level of 98 percent. Find the reorder point, s , and the order-up-to-level, S , for the ( s,S ) inventory policy. Table 1: Historical data Month Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Sales 350 380 420 450 400 400 458 426 410 400 395 385 Question 3 Continue with Question 2, and assume that the lead time ceases to be ﬁxed due to some reason. The variable lead time (in week) for each of the 12 months is shown in Table 2. Find again the reorder point, s , and the order-up-to-level, S , for the ( s,S ) inventory policy, in order to achieve the same service level of 98 percent. Table 2: Variable lead time Month Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Lead time 1.3 1.4 1.6 2 1.5 1.5 2.5 1.8 1.6 1.5 1.7 1.6 2...
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- Spring '10
- Supply Chain Management, service level, Inventory Control and Management