Ken Ells,owner and Operator of Kennels,Inc

question 39

Short Answer

Ken Ells,owner and operator of Kennels,Inc.is concerned that the person in charge of ordering dog food is often incurring an order expediting expense because he is waiting too long (letting the inventory level drop too low)before ordering.
Past data indicates that demand during lead time (when expediting does not occur)is normally distributed with a mean of 340 pounds and a standard deviation of 45 pounds.
Ken wants the probability of running out of dog food to be .03.
a. If the current order point is 400 pounds, what is the resulting service level?
b. If Ken wants a service level of 97% for dog food, what should be the order point?

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Definitions:

Educational Level

The highest degree or level of school completed by an individual, often used as a measure of socioeconomic status and predictor of health outcomes.

Alcohol Consumption

The intake of beverages containing ethanol, ranging from moderate drinking to heavy alcohol use.

Korsakoff Syndrome

A chronic memory disorder caused by severe deficiency of thiamine (vitamin B1), most commonly caused by alcohol abuse.

Memory Impairment

A condition characterized by the loss or decline in the ability to remember or recall past events or learned information.