The Operations Manager at a Chemical Company That Produces Insecticide

question 36

Essay

The operations manager at a chemical company that produces insecticide for use in commercial applications is attempting to set a safety stock level for a key ingredient that is used in their most powerful product.She believes that demand during lead time for this ingredient is normally distributed based on past data.In addition, she believes that future use is accurately depicted by these historical demand-during-lead-time data (in gallons): 55, 75, 75, 70, 80, 60, 50, 70, 60, and 85.She estimates the standard deviation of demand during the lead time to be 8.5 gallons.
a.What is the average demand during the lead time for this key ingredient?
b.What is the safety stock they need to provide a 95% service level?
c.What is the order point the company should use?

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Definitions:

Neurocognitive Disorders

A category of mental health disorders that primarily affect cognitive abilities including learning, memory, perception, and problem-solving.

Pseudo-dementia

A condition that mimics the symptoms of dementia but is actually caused by other psychiatric disorders, such as depression.

Cortical Degeneration

It refers to the progressive loss of brain cells in the cerebral cortex, a part of the brain that plays key roles in memory, attention, perception, cognition, awareness, thought, language, and consciousness.

Depressive Disorders

A group of mental health conditions characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.