Exercise 12-19:
Inputs
Average demand per unit time, D = 1,000
Lead time, L = 4
SD of demand per unit time, σD = 400
Review Interval, T = 8
Target cycle service level 0.95
Distribution of Demand during T + L
Mean demand during T+L, DT+L = 12,000
SD of demand during T+L, σT+L = 1,386
Safety Inventory and Order up to Level Using Period Review
Safety Inventory ss = 2,279
Order up to level OUL = 14,279
Safety Inventory Using Continuous Review
SD of demand during L, σL = 800
Safety inventory, ss = 1,316
CR – 12/3/2020 10:00 AM Page 1 Ex 12-19.xlsx – VALUES