Asked by Blossom Child on Jun 25, 2024
Verified
Demand for gallons of milk is normal with a weekly mean of 50 and standard deviation of 15. How many additional gallons of milk must be stocked to increase the service level from 50% to 80%?
Standard Deviation
A measure that indicates the amount of variation or dispersion of a set of values from the mean.
Service Level
A measure of the quality and timeliness of service provided to customers, often framed as a percentage of customer demands met on time.
Gallons of Milk
A volumetric measurement commonly used to quantify liquid milk in a specified quantity for consumption, production, or sale.
- Determine the critical reorder junctures and safety stock volumes to control inventory depletions and preserve specified service levels.
- Ascertain the most economical inventory strategy in situations characterized by unpredictable demand.
- Gain insight into the compromise between service level, safety stock levels, and inventory-related costs.
Verified Answer
PP
Patrice PoirierJun 30, 2024
Final Answer :
Z for 50% is 0, Z for 80% is .84. Thus the increase in milk stock would be 15(.84) - 15(0) = 12.6 = 13 gallons extra
Learning Objectives
- Determine the critical reorder junctures and safety stock volumes to control inventory depletions and preserve specified service levels.
- Ascertain the most economical inventory strategy in situations characterized by unpredictable demand.
- Gain insight into the compromise between service level, safety stock levels, and inventory-related costs.