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MIT15_762JS11_assn01

# MIT15_762JS11_assn01 - 15.762 ESD.267J 1.273J Spring 2011...

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15.762, ESD.267J, 1.273J Spring 2011 Problem Set – due on Session 5 . Please do this in groups, and submit one answer set per group. You should use the (approximate) models that were covered in class. For some questions you will need to use material beyond what we did in class, such as models from your introductory class. Please do all of the problems. Problems #1 and 6 removed due to copyright restrictions. 2. Consider an item whose inventory is controlled by a periodic review, base-stock policy. Suppose the review period is 1 week (7 days), the replenishment lead-time is 3 days, and the daily demand is normally distributed with mean 20 and standard deviation 4.

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a. What is the base stock B to assure that the coverage probability (Type I service) is 0.98? What is the average inventory level? How many stock-out events might you expect per year? (Assume 50 weeks per year) b. What is the base stock B to assure that the fill rate (Type II service) is 0.98? What is the average inventory level? How many stock-out events might you expect per year? (Assume 50 weeks per year)
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