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Using the fixed-time-period inventory model, and given an average daily demand of 75 units, 10 days between inventory reviews, 2 days for lead time, 50 units of inventory on hand, a service probability of 95 percent, and a standard deviation of demand over the review and lead time of 8 units, which of the following is the order quantity?

a. 863
b. 948
c. 1,044
d. 1,178
e. 4,510

User RedSIght
by
8.3k points

1 Answer

14 votes

Answer:

a. 863

Step-by-step explanation:

Calculation for the order quantity

Order quantity = 75 x (10 + 2) + (1.64 x 8) - 50

Order quantity = (75 x 12) + (1.64 x 8) - 50

Order quantity= 900 + 13.12 - 50

Order quantity= 863.12

Order quantity = 863

Therefore the Order quantity will be 863

User Rynd
by
8.3k points

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