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Unformatted text preview: BUSI 403 Problem Set F Fall 2008 Due: 10/09/08 1 Problem 1 Weekly Demand Information AZS-1050 AZS-2000 Mean 200 180 Standard deviation 120 140 Lead time 1 week 1 week a. i) What is the safety stock required for AZS-1050 motherboard if hp wants to maintain a 98% service level? For a 98% service level, the z value is 2. 054. (Using the Excel function NORMINV(0.98,0,1) = 2.054) Safety stock for AZS-1050 = z L RP = 2. 054 * 120 * 1 1 = 349 units ii) What is the safety stock required for AZS-2000 motherboard if hp wants to maintain a 98% service level? Safety stock for AZS-2000 = z L RP = 2. 054 * 140 * 1 1 = 407 units b. Another motherboard, AZS-3000, can be used for both Presario and Pavilion series. The replenishment lead time for AZS-3000 is 1 week. What is the required safety stock for AZS-3000 if it is used for both series to maintain a 98% service level? Standard deviation for AZS-3000: 184.39 Safety stock for AZS-3000 = z L RP = 2. 054 * 184.39 * 1 1 = 536 units c. The unit holding cost for all motherboards is $700 per year. What is the annual savings (in $) in safety stock holding cost if AZS-3000 is used for both series?...
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This document was uploaded on 11/04/2011 for the course BUSI 403 at UNC.
- Fall '08