Demand for a Product Is Relatively Constant at Five Units

question 5

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 percent service level?
(b)What reorder point provides a 90 percent service level?
(c)If the lead time standard deviation can be reduced from 3 days to 1,what reorder point now provides 90 percent service? How much is safety stock reduced by this change?

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Definitions:

Directional Terminology

Terms used to describe the locations of structures or the direction of movements in the body relative to other structures.

Posterior

Pertaining to or located at the back of the body or an organ, opposite of anterior.

Anterior

Referring to the front or forward part of an organism or structure.

Regression Coefficients

Numerical values that represent the relationship between the independent variable(s) and the dependent variable in a regression analysis.