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Posted: June 4th, 2023
What is the probability of stock-out in the lead time
The weekly sales of wooden chairs at a manufacturing Lazy Boy vary, with an average of 1000 per week and a standard deviation of 250 per week. The production follows sales closely such that the consumption of the wood material also follows the same distribution. There is 1 week replenishment lead time of wood material from the supplier. The company place an order whenever the material is only enough to make 1200 chairs.Please solve in excel thank you.1) What is the probability of stock-out in the lead time?2) What should be the safety stock, if this company wants to have the service level of %95?3) Recalculate the safety stock for service level of %90 and %98. What is your observation?
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