Answer:
219.57 units
Explanation:
Given :
Daily demand, d = 7 per day
Standard deviation, = 2 per day
Service probability = 98%
Total number of days per week = 7
Lead time , L = 3 days
On hand inventory, I = 35
Now calculating the optimal order quantity by using the given formula,
.............(i)
First, we will find out the value of
and z.
Therefore,
![$\sigma_{r+L}=\sqrt{(30+3)(2)^2}$](https://tex.z-dn.net/?f=%24%5Csigma_%7Br%2BL%7D%3D%5Csqrt%7B%2830%2B3%29%282%29%5E2%7D%24)
![$=\sqrt{132}$](https://tex.z-dn.net/?f=%24%3D%5Csqrt%7B132%7D%24)
= 11.48
Now the value of z can be found out from the z-table,
Z value for 98% service level = 2.054
Now putting the value of
and z in equation (i), we get,
= (7)(30+3)+(2.054)(11.48) - 35
= 231 + 23.57 - 35
= 219.57 units
So the optimal number of the units required to be order = 219.57 units