Answered

The College Bookstore sells a unique calculator to college students. The demand for this calculator is constant at 20 units per day. The lead time for this calculator is variable at an average of 9 days with a standard deviation of 2 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer.
a. 182 units
b. 226 units
c. 246 units
d. 26 units
e. 46 units



Answer :

Tundexi

Answer:

c. 246 units

Explanation:

Daily demand, d = 20 units

Service Level = 95 % = 0.95. Z (according to Standardized Normal Curve) = 1.65

Average Lead Time, LT-bar = 9 days

Standard deviation of Lead Time, σLT = 2 days

Reorder Point = Expected Demand during Lead time + Safety Stock

Reorder Point = d*LT-bar + z*d*σLT

Reorder Point = (20*9) + (1.65*20*2)

Reorder Point = 180 + 66

Reorder Point = 246 units