A how many pallets should be kept in inventory for a 90


Daily demand in pallets for a particular product made for a particular customer is distributed as follows: (5, 75%), (6, 18%), (7, 7%)

a. How many pallets should be kept in inventory for a 90% service level? For a 95% service level?

b. Compute the 2-day distribution of demand.

c. Suppose the inventory can only be re-supplied every 2-days. How many pallets should be kept in inventory for each of the following service levels: 90%, 95%, 99%, and 99.5%?

d. Suppose the inventory replenishment is unreliable. The replenishment occurs in one day 75% of the time and in 2 days 25% of the time. How many pallets should be kept in inventory for each of the following service levels: 90% and 99%?

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Management Theories: A how many pallets should be kept in inventory for a 90
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