Demand for a Product Is Relatively Constant at Five Units

question 83

Essay

Demand for a product is relatively constant at five units per day. Lead time for this product is normally distributed with a mean of ten days and a standard deviation of three days.
a. What reorder point provides a 50% service level?
b. What reorder point provides a 90% service level?
c. If the lead time standard deviation can be reduced from 3 days to 1, what reorder point now provides 90% service? How much is safety stock reduced by this change?

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Definitions:

Chromosome

A long DNA molecule with part or all of the genetic material of an organism.

Polygenic Inheritance

The inheritance of traits controlled by two or more genes, resulting in a wide range of phenotypes for certain characteristics.

Independent Pairs

A concept in statistics referring to pairs of observations that are not influenced by any of the other pairs in a data set.

Additive Effects

The combined impact of different genes on a phenotype, where the total effect is the sum of individual gene effects.