Pros: Company could make more profit from selling multi products. Cons: All products must be in stock for an order to be filled. 2) Cycle service level
Pros: Company could determine the percentage of satisfied customer s and lost customers and improve the service level from there. Cons: Lost customers will not come back again.
4. Uncertainty on safety inventory of supply will increase in safety stocks and the reorder point. 5. Solution: Average demand per week D=300
Standard deviation a weekly demand D=200
Lead time=2weeks CSL=95% Z=1.645(from Z table) Safety stock, SS=Z * D *√L=1.645*200*√2=465.3
So Best Buy should carry 464 safety inventory of cellphone. Their ROP should be 1065. 6. Solution: Order quantity=500
Average demand per week=300
Standard deviation of weekly demand, D =200
Lead time=2 weeks Product fill rate, fr=99% L = √L*D =√2*200=282.8
Fill rate, fr = 1 (L /Q)*P(z)
So 0.99=1-(200/500*P(z)) P(z)=0.0176 Z=1.96(from Z...