Calculating Order Points
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Bell computers produces and stocks computer printers in its finished goods warehouse. These DDLT historical data are believed to be representative of future demand for one printer model.
Actual DDLT Frequency
0-29 0
30-39 .10
40-49 .10
50-59 .15
60-69 .20
70-79 .25
80-89 .10
90-99 .05
100-109 .05
110-120 0
I was able to figure out the first question but not the second and third.
1. If at least a 90 percent service level is to be provided for these printers a. what would be the order point? b. what would be the safety stock?
2. If the DDLT for the printer is actually normally distributed with a mean of 65 and a standard deviation of 10, and a 90 % service level: a. what is the order point? b. what is the safety stock?
3. If the lead time for these printers is so stable that the lead time can be a constant 6.5 days, the demand per day is normally distributed with a mean of 10 and a dtandard deviation of 2, and a 90% service level a. what is the order point? b. what is the safety stock?
So, order point = EDDLT + SS but i can't figure out how exactly to do this.
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Solution Summary
Solutions shows calculations of order point and safety stock,
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