Quiz 7 - periodic review - solution

Quiz 7 periodic - (Exposure Period L T = 4 2.5= 6.5 months 2 Total demand during the Protection Interval has Mean = ࠵ ࠵ ࠵ = 28*6.5 = 182

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Quiz 7, DSC 335 Name _________________ ( Periodic review inventory model ) Weiss’s paint store keeps an inventory of white latex paint product in the gallon size. The manager reviews the stock level every 4 months. Monthly demand is normally distributed, with the mean value of 28 gallons and the standard deviation of 8 gallons. Re-supply lead time is 2.5 months. The store manager targets a 95 percent in-stock probability (where z = 1.64). Answer the following questions. 1. The length of Protection Interval
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Unformatted text preview: (Exposure Period), L+T = 4+2.5= 6.5 months 2. Total demand during the Protection Interval has Mean = ࠵ ( ࠵ + ࠵ ) = 28*6.5 = 182 ; Standard deviation, σ L+T = ࠵ + ࠵ ∗ ࠵ ! = 6 . 5 ∗ 8 = 20 . 4 3. Safety stock, SS = ࠵ ∗ ࠵ ! ! ! = 1 . 64 ∗ 20 . 4 = 33 . 4 ; Target inventory position = ࠵ ࠵ + ࠵ + ࠵࠵ = 182 + 33 . 4 = 215 . 4 ; 4. Assume in the beginning of a period, the starting on-hand inventory is 100. Order quantity for that period = 215.4 – 100 = 115.4 = 115....
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This note was uploaded on 04/05/2012 for the course DSC 335 taught by Professor Tolgaaydinliyim during the Fall '10 term at University of Oregon.

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