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daliqiqi daliqiqi
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6 years ago
Weekly demand for avocados at the Guac Shop is normally distributed with a mean of 2500 and a standard deviation of 650.
 
  The store manager has decided to follow a periodic review policy to manage inventory of avocados. They plan to order every two weeks. The farmers currently take two weeks to fill an order. Given a desired CSL of 97.5 percent, how much safety inventory should the Guac Shop carry? What should their OUL be?
  What will be an ideal response?
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#1
6 years ago
Answer:
ss = Fs-1(CSL)  T + L
= NORMSINV(0.975)  (650  )
= 2547.95  2548
OUL = DT + L + ss
= 2500(4) + 2548
= 12,548
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