Math Problem Statement
Halifax Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: Lead time is normally distributed with an average of 7 weeks and a standard deviation of 1 week. Demand is also a variable and normally distributed with a mean of 250 cigars per week and a standard deviation of 27 cigars. Refer to the standard normal tableLOADING... for z-values. This exercise contains only parts a and b. Part 2 a) For a 98% service level, what is the ROP? The reorder point is __ cigars Part 3 b) What is the ROP for a 99% service level? The reorder point is ___ cigars
Solution
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Math Problem Analysis
Mathematical Concepts
Statistics
Probability
Inventory Management
Formulas
Reorder Point formula: ROP = (Demand per week * Lead time) + Z * sigma_d
Theorems
-
Suitable Grade Level
Advanced Undergraduate
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