QUESTION 7 The company Dog’s Home store shows that it’s 2 pound bag of raw chews
ID: 360646 • Letter: Q
Question
QUESTION 7
The company Dog’s Home store shows that it’s 2 pound bag of raw chews is normally distributed with a mean and standard deviation of 231 and 6, respectively. Determine the reorder point for a 87% customer service level.
a)Greater than or equal to 235 and less than or equal to 236
Greater than or equal to 237 and less than or equal to 238
Greater than or equal to 231 and less than or equal to 232
Greater than or equal to 233 and less than or equal to 234
The forecasted mean daily demand for a product is 5210 units, the mean lead time is 8 days, and the standard deviation of forecast error during lead time is 1235 units. What is the service level for this product when the reorder point is 45130 units?
2.79%
77.94%
99.74%
None of the above
what is the Z Score for 95%
a)1.65
1.645
1.64
1.66
a)Greater than or equal to 235 and less than or equal to 236
b)Greater than or equal to 237 and less than or equal to 238
c)Greater than or equal to 231 and less than or equal to 232
d)Greater than or equal to 233 and less than or equal to 234
Explanation / Answer
Safety stock
=z*Std dev*sqrt(L)
6.758
units
Reorder point, R
R = demand during lead time + safety stock
Demand during lead time
231
units
1.b.
From above formula, R =
237.7583468
units
2. d.With same formula as above the service level is 83.9%
3. b. z=NORMSINV(service level)=1.64485
Safety stock
=z*Std dev*sqrt(L)
6.758
units
Reorder point, R
R = demand during lead time + safety stock
Demand during lead time
231
units
1.b.
From above formula, R =
237.7583468
units
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