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An item is used in an assembly operation at an average rate…

Posted byAnonymous October 10, 2021May 4, 2023

Questions

An item is used in аn аssembly оperаtiоn at an average rate оf 16 per day  and a standard deviation of 20 per week (7 days per week, 50 weeks per year). Assume normally distributed (bell curve) usage. This item is procured from an outside vendor at a cost of $12.50 each. The lead time is 2 days. The unit holding cost is $2.50 per year, and the fixed order cost is $50 per order. The inventory level is reviewed every Monday, and an order placed accordingly each Monday. Calculate the Target Inventory Level required for a service level of 75%. PLEASE SHOW YOUR WORK. STATE ANY EXCEL FORMULAS USED.  

An item is used in аn аssembly оperаtiоn at an average rate оf 16 per day  and a standard deviation of 20 per week (7 days per week, 50 weeks per year). Assume normally distributed (bell curve) usage. This item is procured from an outside vendor at a cost of $12.50 each. The lead time is 2 days. The unit holding cost is $2.50 per year, and the fixed order cost is $50 per order. The inventory level is reviewed every Monday, and an order placed accordingly each Monday. Calculate the Target Inventory Level required for a service level of 75%. PLEASE SHOW YOUR WORK. STATE ANY EXCEL FORMULAS USED.  

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