Question

ABC Electronic ware house sale batteries, and is very popular item. Demand for this is normally distributed. Average demand was 50 packs per day and a standard deviation of 10. Lead time is constant and which is 4 days. A 99% service level was desired.

A) 241

B) 221

C) 235

D) 226

E) 247

Now, ABC Electronic ware house sale customize Laptop. Lead time for this is normally distributed. Average Lead time is 10 days and a standard deviation of 4. The daily demand is constant at 10 packs per day. An 85% service level was desired.

A) 151

B) 142

C) 166

D) 193

E) 166

Answer 1

1)

mean lead time μl=	4
standard deviation during lead time σl=	0
mean demand μd=	50
standard deviation of demand σd=	10

for 99% service level , corresponding critical z =

2.33

reorder point=demand during material in transit+safety stock
=lead time*demand/time period +safety stock
=μl*μd+z*sqrt(μl*σd2+μd2*σl2) =	246.600~ 247

option E is correct

2)

mean lead time μl=	10
standard deviation during lead time σl=	4
mean demand μd=	10
standard deviation of demand σd=	0

for 85% service level , corresponding critical z =

1.04

reorder point=demand during material in transit+safety stock
=lead time*demand/time period +safety stock
=μl*μd+z*sqrt(μl*σd2+μd2*σl2) =	141.600~ 142

option B is correct