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For its most sold product, a department store estimates a stable mean demand rate of 200 units per week and a weekly variance of 1,000 units2, for the whole year. If the store is able to place and receive orders almost immediately and whenever it desires, (xvi) what would be the service level with zero safety inventory? (xvii) What would be the safety inventory for a service level of 80%? If the lead time is now one week, (xviii) what would be the safety inventory for a service level of 80%? If the store places one order every two weeks, (xix) what would be the safety inventory for a service level of 80%? If the lead time is one week and the store places one order every two weeks, (xx) what would the safety inventory be for a service level of 80%?

Operation Management, Management Studies

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