Weekly Demand for Loaves of Blunder Bread at a Kroger

question 66

Essay

Weekly demand for loaves of Blunder Bread at a Kroger store is normally distributed with a mean of 500 and a standard deviation of 200.Blunder Bread takes two weeks to supply a Kroger order.Kroger is targeting a CSL of 90 percent and monitors its inventory continuously.How much safety inventory of bread loaves should Kroger carry? What should their ROP be?

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Definitions:

Controllable Variance

A measure in accounting that represents the difference between actual costs and the budgeted amounts that management could control or influence.

Indirect Factory Wages

Wages paid to employees who are not directly involved in production but whose services are necessary for the manufacturing process.

Budgeted Amounts

Financial projections or estimates of revenue and expenses over a specified period, used for planning and control purposes.

Direct Labor Time Variance

The difference between the actual time taken to produce a good or service and the estimated time.