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Chapter 12: Managing Inventories
Reorder point/safety stock practicetext problems 4, 6, 7, and 8.
Make note of the following before working these problems.
For #4, only determine the reorder point WITH safety stock. The problem provides the demand
forecast and the lead time. Use 40 boxes/month for the standard deviation of demand, and use
98% for the probability of not stocking out.
For #6, do part d only, reorder point with safety stock.
For #7, only determine the reorder point. The demand forecast, standard deviation of demand,
lead time, and the service level (probability of not stocking out) are provided.
For #8, treat this as a fixed order quantity/reorder pointsafety stock problem, and determine the
reorder point. The demand forecast, standard deviation of demand, lead time, and service level
(probability of not stocking out) are provided.
Solutions appear on the next page.
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(4)
Average demand=200 boxes/month
Standard deviation of demand=40 boxes/month
Lead time=1 week
Probability of not stocking out=98%
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 Spring '12
 Ippolito
 3 weeks, 1 week, 90%, 2 weeks, 0.25 month

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