Question

A lab orders a number of chemicals from the same supplier every 10 days. The lead time is six days. The manager of the lab must determine how much of one of these chemicals to order. Check of stock reviewed that 9 25-milliliter (ml) jars are on hand. Daily usage of the chemical is appropriately normal with a mean of 16 ml per day and a standard deviation of 3.5 ml per day. The desired service level for this chemical is 95%. a) How many jars of the chemical should he ordered

Answer 1

3 jars of the chemical should be ordered

Explanation:

Given the data in the question;

Ol = 10 days

d = 16 ml

z = 1.65 at 95% service level

σ = 3.5 ml

Check of stock reviewed that 9 of 25-milliliter (ml) jars are on hand

so inventory in position = 9 × 25 = 225 ml

now,

since this is a fixed-order-internal system;

first we determine our Target inventory

Target inventory = 16 × ( 10 + 6) + 1.65√( 10 + 6 ) × 3.5

Target inventory = 265 + 23.1

Target inventory = 288.1

so

Amount to order = Target inventory - inventory in position

Amount to order = 288.1 - 225 = 63.1 ml

∴ number of jars to order will be;

⇒ 63.1 ml/ 25 ml = 2.5 { approximately 3 jars }

Therefore, 3 jars of the chemical should be ordered