Scenario 12.3 - The Cat Café
Daily demand for cat litter at the Cat Café in Jones is 1500 ounces with a standard deviation of 300 ounces.The proprietor orders the best cat litter money can buy online,and the average shipping time is 5 days.Of course,if the order is placed at the end of the week,then it may take a while longer to receive the shipment,so the standard deviation of lead time is 2 days.The state health department keeps a close eye on the condition of the Cat Café;a cat-loving inspector visits at least twice a week,ostensibly to inspect,but mostly to pet his favorite Scottish Fold cat named Groundskeeper Willie.
-Suppose the café wishes to erase any hint of impropriety and wants to peg their service level at 99%.How many days of safety inventory they should carry?
A)4.77 days
B)5.12 days
C)5.33 days
D)5.67 days

Question

Quizplus · Accepted Answer

The correct answer is A.The safety stock is given by the formula:SS = Z * sqrt(LT * (D^2 + S^2))where:Z is the z-score for the desired service levelLT is the lead timeD is the daily demandS is the standard deviation of demandPlugging in the values given in the question, we get:SS = 2.326 * sqrt(5 * (1500^2 + 300^2)) = 4.77 daysTherefore, the café should carry 4.77 days of safety inventory.

Scenario 12.3 - the Cat Café