Jay's Café orders cans of beans every 2 weeks.It typically takes the supplier 2 days to fulfill the order.Jay uses 5 cans per day on average, with a standard deviation of 2 units per day.Assume that Jay wants to have a 50% service level on the availability of beans.There are currently 5 cans of beans in Jay's inventory.How many cans should Jay order?

Question

Quizplus · Accepted Answer

To calculate the order quantity, we need to determine the demand during the lead time and the review period. The lead time is 2 days, and the review period is 14 days (2 weeks). The average daily demand is 5 cans, so the total demand over 16 days is 5 * 16 = 80 cans. With a 50% service level, we don't need to add any safety stock. Jay currently has 5 cans, so he should order 80 - 5 = 75 cans.

Jay's Café Orders Cans of Beans Every 2 Weeks