Chapter 11- Solved Problems
Problem 1
An item in a periodic review system experiences an average demand of 42 units per day.
Management has determined that the appropriate service level for this item is 95%. If
orders are placed every 7 days, the order replenishment lead time is 2 days, and the
standard deviation of demand during the replenishment and lead time is 57 units; (a) what
is the restocking level? (b) If at the end of the 7-day period the inventory is counted and
the on-hand level is 90 units, how much is the order placed for?
Answer Problem 1
(a)
LRPLRP zR ++ +=
= (42*9) + (1.65)(57)
= 472.05
(b) Q = R – I
= 473 – 90
= 383
Problem 2
