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Hatshy [7]
3 years ago
7

The College Bookstore sells a unique calculator to college students. The demand for this calculator has a normal distribution wi

th an average daily demand of 20 units and a standard deviation of 4 units per day. The lead time for this calculator is 9 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. quiz;et
Business
1 answer:
ale4655 [162]3 years ago
3 0

Answer:

A) 200 units

Explanation:

mean daily demand = 20 calculators

standard deviation = 4 calculators

lead time = 9 days

z-critical value (for 95% in-stock probability) = 1.96

normal consumption during lead-time:

= mean demand × lead time

= 20 × 9

= 180 calculators

safety stock = z × SD × √L

                    = 1.96 × 4 × √9

                    = 1.96 × 4 × 3

                    = 23.52 calculators

reorder point = normal consumption + safety stock

                       = 180 + 23.52

                       = 203.52 calculators

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