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Annual demand for a product is 12,480 units; weekly demand is 240 units with a standard deviation of 45 units. The cost of placing an order is $70, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.60 per unit. a. To provide a 90 percent service probability, what must the reorder point be? (Round your answer to the nearest whole number.) Reorder point units b. Suppose the production manager is told to reduce the safety stock of this item by 70 units. If this is done, what will the new service probability be? (Round your answer to 2 decimal places.) Service probability

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Operation Management, Management Studies

Category:- Operation Management
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