Weekly demand for a product is 250 units with a standard deviation of 60 units (assume 52 weeks per year). Lead-time is 3 weeks. Calculate the safety stock and the reorder point for 98 percent service level.

Explanation:

Data provided in the question

Weekly demand for a product = 250 units

Standard deviation = 60 units

Lead time = 3 weeks

Service level = 98%

And, the service factor from the normal distribution is 2.05

Now the

Safety stock = Service factor × standard deviation × √lead time

= 2.05 × 60 × 1.73

= 212.79

Now the reorder point is

= Weekly demand × lead time + safety stock

= 250 units × 3 weeks + 212.79

= 962.79

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

answermarginal cost;