Data was collected on demand during lead time

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An item has an annual demand of 3000 units. There are 300 working days in the year. The EOQ is 100 units, and the lead time is 4 days. If the demand is uniform , compute the following: a. Number of orders per year b. Safety stock (SS) c. Reorder point (ROP) d. Average inventory For the rest of this assignment, assume that demand is NOT uniform but random and volatile. Data was collected on demand during lead time (DDLT), and here are the results: Mean of DDLT = 40 units Standard deviation of DDLT = 20 units Suppose the ROP is set at 72 units. Compute the following: e. Implied SS f. Implied cycle service level (CSL) g. Average inventory Compute the following for a CSL of 90%. h. Safety stock i. Reorder point j. Average inventory Note: Average inventory is the sum of the safety stock and half of the cycle inventory as can be seen from the “saw tooth” diagram below.

Reference no: EM132234111

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