Big Ike Wheels Stocks High-Demand Cycle Rims That Have a Normally

question 95

Short Answer

Big Ike Wheels stocks high-demand cycle rims that have a normally distributed demand during the reorder period. The average daily demand is 75 rims. If the lead time is 4 days and the standard deviation of demand during the reorder period is 15, what is
A) the amount of safety stock needed to provide a 95 percent service level to their customers
B) the reorder point

• A) the amount of safety stock needed to provide a 95 percent service level to their customers
• B) the reorder point

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Definitions:

Bilateral Contract

An agreement involving two parties where each promises to perform an act in exchange for the other's act.

Unilateral Contract

A legal agreement in which only one party makes a promise or undertakes a performance obligation in exchange for an act by the other party.

Breach of Contract

An act of breaking the terms set out in a contract, which can result in legal consequences for the party that fails to honor its commitments.

True Value

The genuine or actual worth of an item, service, or financial instrument as determined by underlying characteristics and market conditions.