Barbara Flynn is n charge of maintaing hospital supplies at General Hospital. Du

Question

Barbara Flynn is n charge of maintaing hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60 (and was normally disturbuted). Furthermore, the standard deviation for BX-5 was 8. Ms. Flynn would like to maintain a 95% service level. Refer to the standard normal table for z-values. Whai safety stock level do you recommend for BX-5? Safety stock = 13 units (round your response to the nearest whole number). What is the appropriate reorder point? Reorder Point = bsemi Q units (round your response to the nearest whole number).

Explanation / Answer

a. Safety stock = z*standard deviation of demand during lead time

z for 95% service level = 1.65 (from standard normal table)

Thus, safety stock = 1.65*8 = 13.20 or 13 (rounded off).

b. reorder point = demand during lead time+safety stock

= 60+13

= 73

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