Company safety stock for this component is approximately

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Reference no: EM132172540

1. The demand for an electronic component is normally distributed with an average demand during lead time of 4500 units and a standard deviation of 150. If a service level of 95% is desired, then the company’s safety stock for this component is approximately?

A) 150 units.

B) 247 units.

C) 336 units.

D) 740 units.

2. A product’s usage is normally distributed with an average demand during lead time of 8,000 units and a standard deviation of 250. Currently, the reorder point for this product is 8,200. If the company would like to have a service level of 95% for this product then

A) it must decrease its safety stock by approximately 412 units.

B) it must decrease its safety stock by approximately 212 units.

C) it must increase its safety stock by approximately 412 units.

D) it must increase its safety stock by approximately 212 units

3. A local company makes athletic clothing and they are preparing aggregate production plans on a quarterly basis for the coming year for their line of women's wear. They have the following information available to develop a level capacity and a matching (chase) demand plan: (Assume that pattern of demand repeats each year, that is the demand in quarter 4 of the previous year was 13,000 units) Number of working days per quarter = 65 days Number of hours per day per person = 8 hours Labor to produce one unit = 5 hours Demand for four quarters respectively: 12,300, 12,500, 12,200, 13,000 units Cost of hiring a worker = $800 Cost of laying off a worker = $500 Inventory carrying cost per unit per year = $60

What is the total inventory carrying (holding) cost under the level strategy?

a. $13,500

b. $54,000

c. $4,500

d. $0

e. $27,000

Reference no: EM132172540

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