Scenario 9.11
The Hastings Company is a nation-wide wholesaler for small electronic devices.One of its most popular items is a calculator,the "Whizz-Bang 1100".Hastings's demand,lead time and cycle service requirements for the W-B 1100 are as follows:
Demand = 25,000 units/year
Number of weeks per year = 50 weeks
Standard deviation of weekly demand = 100 units
Average lead time = 6 weeks
Standard deviation of lead time: 2 weeks
Cycle-service level = 85%
Hastings uses a continuous review system to control inventory.
A normal distribution table is appended to this exam.
-Use the information in Scenario 9.11.If Hastings decides to increase its cycle-service level to 90%,what is the new reorder point if all other parameters remain the same for the Whizz-Bang 1100?
A) greater than 0 but less than or equal to 1,500 units
B) greater than 1,500 units but less than or equal to 3,000 units
C) greater than 3,000 units but less than or equal to 4,500 units
D) greater than 4,500 units but less than or equal to 6,000 units
E) greater than 6,000 units
Correct Answer:
Verified
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