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Table 5.115.11 The Following Information Has Been Collected on an Independent Demand

Question 30

Multiple Choice

Table 5.115.11
The following information has been collected on an independent demand item:
Demand =30= 30 units per week
(assume 52 weeks/ year)
Ordering and setup cost =$50= \$ 50 perorder
Holding cost =$8= \$ 8 per unit per year
Lead time =1= 1 week
Standard deviation in weekly demand =8= 8 units
Cycle- service level =90%= 90 \%
You will need to refer to a normal table to answer the question(s) .
-Use the information from Table 5.11. Design a periodic review system (P system) , with P = 5 weeks. What target inventory T will provide the desired 90 percent cycle- service level?


A) between 188 and 192 units
B) between 53 and 57 units
C) between 172 and 176 units
D) between 202 and 206 units

Correct Answer:

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