Fixed-order quantity inventory model with safety stock


Fixed-Order Quantity Inventory Model with Safety Stock Problem. A company wants to determine its Reorder Point (ROP). Its demand situation is uncertain and they want to build into the Reorder Point a safety stock. The company wants to have a level of service of 95 percent. If the average daily demand (d-bar units/day) is 8 units/day the lead time (L) is 4 days, and the standard deviation of usage during lead time (σ L) is 2, what is the Reorder Point (ROP)? Given: Find:

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Operation Management: Fixed-order quantity inventory model with safety stock
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