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Safety stock and order point

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Bob Billy is an operations analyst for Dollar-Does-It stores based in Iva, SC.  He is currently studying the order and stocking policies for a top-selling toy.  His analysis has indicated an almost constant lead time of 10 days.  Bob calculated that the daily demand was normally distributed with a mean of 1,250 toys per day with a standard deviation (Ï?d) of 375 toys per day.
a.   Compute the order point for the toy if the service level is specified at 90% during the lead time.
b.  How much safety stock would Bob Billy carry?
 

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Solution Summary

Solution shows calculations of safety stock and reorder point.

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Please find below help on your posting:

Average daily demand = 1250 units
Std dev of daily demand = 375 units
Lead time = 10 days
Service level ...

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