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Consider a periodic review system. The demand is on average 250 units per day, and the standard deviation of demand per day is 35 units. Lead time is 6 days. Orders are placed every 10 days. The firm strives to provide an 80% CSL. (Keep 3 decimals for the standard deviation, but round and to the nearest whole number.)
How many units of safety stock should be ?
What should be the order-up-to level?
Suppose that it is time to review the item. There are 0 units in inventory. An order for 1400 units is on the way, and there is an outstanding backorder for 120 units. How many units should be ordered?
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