1. The quantity of clocks have demand during lead time that is normally distributed, with an average of 20 clocks per week and standard deviation of the lead time is 6. What saefty stock should be held to achieve a 90 percent cycle-service level? What should R be?
2. The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,200 May 2,100 February 1,500 June 2,300 March 1,600 July 1,700 April 1,900 August 1,300 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. The plan is called plan C.
Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August.
The average monthly demand requirement = ____ units
Fill in the table below. (ending inventory & stockout units)
The total stockout cost = ____
The total inventory carrying cost = ____