Unformatted text preview: 5. Lead-time demand for a product is uncertain, and has the following probability distribution: Lead-time demand 5 10 15 20 25 30 Probability 0.05 0.1 0.3 0.35 0.15 0.05 Suppose the desired service level is 0.95. a. Find the reorder level and safety stock. b. The inventory holding cost is $50/unit/year. What is the annual cost of carrying the safety stock? 6. Lead-time demand for a product has a normal probability distribution with a mean of 200 units and a standard deviation of 20 units. Find the reorder level and safety stock, if the desired service level is 95%. 7. The periodic review inventory system is used for a product whose weekly demand is normally distributed with a mean of 1200 units and a standard deviation of 200 units. The review period is 4 weeks, while the lead-time is 1 week. The desired service level is 0.95. a. Find the target inventory. b. At a review point, the inventory position is found to be 619 units. What is the order quantity?...
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- Fall '07
- Normal Distribution, Reorder level, Cycle Time, inventory holding cost, Lead-time demand