Find the safety stock and the reorder point

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Reference no: EM133613208

Consider the company's warehouse is near NY and the procurement decisions faced by the warehouse manager for the battery. Suppose that the average daily demand rate of this part is 100 units and the standard deviation of the daily demand is estimated to be 25. Whenever the manager places an order, the replenishment is received in 1 week. Assume 7 days a week. The service level requirement is 95%. Answer the following questions:

1. Find the safety stock and the reorder point.

2. Assume that the current on-hand inventory is 900 and a withdrawal of 100 units just occurred. Is it time to reorder? Why?

Reference no: EM133613208

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