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auto shop performs a monthly inventory count

An auto shop performs a monthly inventory count for auto parts it carries. Assume 30 days per month. Determine the number of auto parts that should be ordered using the following information: (10 points)

Average daily demand: 20 units
Standard deviation of demand: 25 units/month
Desired service probability: 98%
Current inventory: 30 units
Lead time: 15 days

Solution Preview

Order Size = Mean demand over lead time + safety stock - inventory on hand

Mean demand over lead time = ...

$2.19