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1. Weekly demand for Motorola cell phones at a Best Buy store is normally distributed, with a mean of 300 and a standard deviation of 200. Motorola takes two weeks to supply a Best Buy order. Best Buy is targeting a CSL of 95 percent and monitors its inventory continuously. How much safety inven-tory of cell phones should Best Buy can-y? What should its ROP be?

2. Assume that the Best Buy store in Exercise 1 has a policy of ordering cell phones from Motorola in lots of 500. Weekly demand for Motorola cell phones at the store is normally distributed, with a mean of 300 and a standard deviation of 200. Motorola takes two weeks to supply an order. If the store manager is targeting a fill rate of 99 percent, what safety inventory should the store carry? What should its ROP be?

3: Weekly demand for HP printers at a Sam's Club store is normally distributed, with a mean of 250 and a standard deviation of 150. The store manager continuously monitors inventory and currently orders 1,000 printers each time the inventory drops to 600 printers. HP currently takes two weeks to fill an order. How much safety inventory does the store carry? What CSL does Sam's Club achieve as a result of this policy? What fill rate does the store achieve?

Question 1: Evaluating Safety Inventory Given an Inventory Policy

Assume that weekly demand for phones at B&M Office Supplies is normally distributed, with a mean of 2,500 and a standard deviation of 500. The manufacturer takes two weeks to fill an order placed by the B&M manager. The store manager currently orders 10,000 phones when the inventory on hand drops to 6,000. Evaluate the safety inventory and the average inventory carried by B&M. Also evaluate the average time a phone spends at B&M.

Question 2: Evaluating Fill Rate Given a Replenishment Policy

Sample 12-2, recall that weekly demand for phones at B&M is normally distributed, with 3 mean of 2,500 and a standard deviation of 500. The replenishment lead time is two weeks. Assume that the demand is independent from one week to the next. Evaluate the fill rate resulting from the policy of ordering 10,000 phones when there are 6,000 phones in inventory.


Question 3: Evaluating Safety Inventory Given a Desired Cycle Service Level

Weekly demand for Legos at a Wal-Mart store is normally distributed. with a mean of 2.500 boxes and a standard deviation of 500. The replenishment lead time is two week,. Assuming a continuous¬resiew replenishment policy, evaluate the safety inventory that the store should carry to achieve a CSL of 90 percent.

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