Question

A machine shop uses a periodic system to maintain the inventory saw blades. The review period is four days and lead time is two days. They use an average of 11 saw blades per day. The standard deviation of use over a six-day period is 9 saw blades. Saw blades aren't the most critical item they carry, but the manager would like to limit the probability of a stockout to 2.5% of the time. What should their restocking level be

Answer 1

the restocking level is 147 units

Step-by-step explanation:

The computation of the restocking level is shown below:

= (11 × (2 + 4)) + 9 × 1.96

= 147 units

The 1.96 comes from

= 100 - 2.5%

= 97%

The value of z for 97% is 1.96

Hence, the restocking level is 147 units

The same would be considered and relevant too