Product A’s inventory is controlled by a continuous review policy. Let us consider that the replenishment lead-time is 7 days. The weekly demand is normally distributed with mean 250 and standard deviation 64.55. Let us consider the optimal order quantity is 250 units.
1) If we set Re-order point R = 282. Calculate the service level?
2) Calculate the average inventory level?
3) How many stock-out cycles are expected per year? (Assume 350 days per year) and type 1 service level
4) What should the safety stock for a service level of 98%?
5) Suppose there two categories of customers X and Y. We promise
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