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Author Question: The Winfield Distributing Company has maintained an 80% service level policy for inventory of string ... (Read 59 times)

jjjetplane

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Question 1

Demand for ice cream at the Ouachita Dairy can be approximated by a normal distribution with a mean of 47 gallons per day and a standard deviation of 8 gallons per day. The new management desires a service level of 95%. Lead time is four days; the dairy is open seven days a week. What reorder point would be consistent with the desired service level?

Question 2

The Winfield Distributing Company has maintained an 80% service level policy for inventory of string trimmers. Mean demand during the reorder period is 170 trimmers, and the standard deviation is 60 trimmers. The annual cost of carrying one trimmer in inventory is $6. The area sales people have recently told Winfield's management that they could expect a $400 improvement in profit (based on current figures of cost per trimmer) if the service level were increased to 99%. Is it worthwhile for Winfield to make this change?


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Marked as best answer by jjjetplane on Dec 3, 2019

kaylee05

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jjjetplane

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Reply 2 on: Dec 3, 2019
Gracias!


robbielu01

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Reply 3 on: Yesterday
:D TYSM

 

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