A Product Has Variable Demand and Constant Lead Time

question 11

Essay

A product has variable demand and constant lead time. Currently this product is managed by a fixed-period inventory system, for which the review period is one week. Lead time is four weeks. Annually about 5,200 units of this product are sold. The current target inventory is 500 units. Today is review day; 75 units are on the shelves, and orders placed at previous reviews in the amount of 110, 60, and 30 have not yet been received. There are no backorders.
a. How much is the firm allowing for safety stock in this case?
b. What should be the order amount this week?

---

Definitions:

Cultural Clusters

Groups of countries or societies that share similar cultural dimensions and characteristics.

Universally Undesirable

Characteristics or behaviors that are generally considered negative or unwelcome across different cultures and contexts.

Leadership Behaviors

Involves the range of actions and practices undertaken by leaders to influence, motivate, and guide their teams or organizations toward goals.

Asocial

Lack of interest in social interaction or preference for solitary activities; not antisocial, which implies hostility towards society.