Test: Exam 4 Time Remaining: 01:13:18 Submit Test This Question: 1 pt 12 of 37 (

Question

Test: Exam 4 Time Remaining: 01:13:18 Submit Test This Question: 1 pt 12 of 37 (28 complete) This Test: 37 pts possible 00 Based on available information, lead time demand for PC jump drives averages 52 units (normally distributed), with a standard deviation of 5 drives. Management wants a 90% service level. Refer to the standard nomal table for z-values. a) What value of Z should be applied? so b) How many drives should be carred as safety stock?) units (round your rosponse to the nearest whole number, c What is the appropriate reorder point? units round your response to the nearest whole number Enter your answer in each of the answer boxes. ce, nt

Explanation / Answer

Expected demand during lead time = 52 units

Standard deviation of demand during lead time = 5 units

Service level = 90%

a) According to the standard normal table, at 90% service level value of Z = 1.282

b) Safety stock = Z x standard deviation of demand during lead time

= 1.282 x 5 units

= 6.41 or rounded to 6 units

C) Reorder point = Expected demand during lead time + Safety stock

= 52 units + 6 units

= 58 units

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