The injection molding department of Alver Inc. uses an average of 40 pounds of a special powder per day. The plant operates 250 days per year. The daily usage of the powder is normally distributed with a standard deviation of 5 pounds per day. The lead time to obtain the powder from a supplier is 9 days. The annual holding cost is $2 per unit and the cost of ordering the powder is $50.
-Determine the reorder point for a service level of 97%.

Question

Quizplus · Accepted Answer

The Answer of The injection molding department of Alver Inc. uses an average of 40 pounds of a special powder per day. The plant operates 250 days per year. The daily usage of the powder is normally distributed with a standard deviation of 5 pounds per day. The lead time to obtain the powder from a supplier is 9 days. The annual holding cost is $2 per unit and the cost of ordering the powder is $50.
-Determine the reorder point for a service level of 97%.

The Injection Molding Department of Alver Inc