Question

Thanksgiving Inc. sells an average of 200 turkeys weekly, with a standard deviation of 25 (assume a normal distribution). Turkey inventory levels are reviewed every four weeks and it takes two weeks to receive a shipment. Assume Thanksgiving Inc. reviews their inventory two weeks before the Thanksgiving and finds 150 turkeys on hand. Thanksgiving Inc. uses a service level of 95% (z=1.645).

Required:
How many turkeys should Thanksgiving Inc. order?

Answer 1

the number of turkeys is 1,154 units

Step-by-step explanation:

The computation of the number of turkeys is shown below:

= Demand (weeks) + service level of 95% √weeks × standard deviation - turkeys on hand

= 200 (4 +2) + 1.65√4 + 2 × 25 - 150

= 1200 + 101.04 - 150

= 1,154 units

hence, the number of turkeys is 1,154 units