Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). mufflers mufflers per working day per muffler % of item value working days Annual demand 3,750 $ 60 Ordering cost Service probability per order Standard deviation of daily demand 6 92 % Item cost $39.00 Lead time working days Annual holding cost Review period 31 Working days 250 per year 20 a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV) function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Optimal target level
Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). mufflers mufflers per working day per muffler % of item value working days Annual demand 3,750 $ 60 Ordering cost Service probability per order Standard deviation of daily demand 6 92 % Item cost $39.00 Lead time working days Annual holding cost Review period 31 Working days 250 per year 20 a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV) function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) Optimal target level
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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