I WILL REWARD ASAP PLEASE SHOW ALL WORK Problem 1C New Electro CX10, the le dail
ID: 455075 • Letter: I
Question
I WILL REWARD ASAP
PLEASE SHOW ALL WORK Problem 1C New Electro CX10, the le daily (normally distributed) demand is 8 hard drives. The standard deviation of demand (normally distributed), during lead time is 11 hard drives. The company would like to maintain a customer service level of 97%. nics Inc. stocks replacement hard drives for all desktop and laptop computers. For model ad time to obtain a shipment of hard drives after placing an order is 25 days. The average 1. 2. 3. 4. What value of Z should be used? Calculate the average total demand during lead time How many drives should be carried as safety stock? What is the appropriate reorder point? (25 points) Use Normal Curve Areas (page A2) in appendix
Explanation / Answer
1) To find Z score, find the %, then add the number on the left to the number at the top of the column. You'll notice that .9699 (nearly 97%) is on the line called 1.8 and the column .08, so add the two and you get a Z of 1.88
(or)
1) Z for 97% = 1.88
2) Average total demand during lead time LTD = L * R = 25 * 8 = 200
3) Safety stock Isafety = z * standard deviation of lead time demand
= 1.88 * 11 = 20.68 or say 21
4) Reorder Point = average demand during lead time + Safety Stock
= LTD + Isafety = 200 + 21
= 221
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