Scenario 9.12 Demand = 50,000 Units/week

Scenario 9.12
Demand = 50,000 units/week
Standard deviation of weekly demand = 15,000 units
Average lead time = 8 weeks
Standard deviation of lead time: 3 weeks
Cycle-service level = 80%
A continuous review system is used to control inventory.
A normal distribution table is appended to this exam.
-Use the information in Scenario 9.12.What reorder point should the firm use for this product?

A) greater than 0 but less than or equal to 150,000 units
B) greater than 150,000 units but less than or equal to 300,000 units
C) greater than 300,000 units but less than or equal to 400,000 units
D) greater than 400,000 units but less than or equal to 500,000 units
E) greater than 500,000 units

Correct Answer:

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