Lnt acquires a critical part using a periodic review, Ask an Expert

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LNT acquires a critical part using a periodic review inventory system The part has daily demand of 158 with a standard deviation of 34 per day. LNT uses 1.82 as the z value corresponding with their target customer level. Lead time for order arrival is 14 days and the company review its iventory once in every 4 days. Calculate the order-up-to level for this product. (Please round your answer to the closest integer)

For a particular part, the weekly demand is expected to be 435 units, with standard deviation of 32 units. And the part is valued in inventory at $2500 each. Inventory holding rate is 36% per year. The company needs to pay $1200 as a fixed ordering cost. Replenishment lead time is 6 weeks with standard deviation of 1.2 weeks. The company uses continuous review inventory policy, and the CSL for this product is 97.5% . What should be the reorder point? (Please round your answer to the closest integer)

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92545170

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