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4QA3 F12 Week 8 Lecture Notes

# For type 2 service there are a total of 1450

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Unformatted text preview: Stock-outs 0 0 45 0 0 10 0 0 0 0 ●  For a Type 1 service objective there are two cycles out of ten in which a stockout occurs, so the type 1 service level is 80%. ●  For Type 2 service, there are a total of 1,450 units demand and 55 stockouts (which means that 1,395 demand are satisSied). This translates to a 96% Sill rate. 4QA3 F12 A. Gandomi 17 ●  For Type 1 service, if the desired service level is α then: o  Finds R from F(R)= α Inventory Level o  Q=EOQ. Reorder Point (R) Safety Stock (s) Stock (SS) Place order Time Lead Time α = Service Level μ 4QA3 F12 A. Gandomi Safety Stock R 18 ●  ●  Type 2 service results in the constraint n(R)/Q=1 – β. Solution procedure for normally distributed demand: 1.  Start with Q = EOQ. 2.  Find n(R) and L(Z) from: n( R) = (1 − β )Q L( z ) = n ( R ) σ 3.  Using Table A- 4, aind z and...
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