11.2. For a particular SKU, the lead time is 6 weeks, the average demand is 90 units a week, and safetystock is 200 units. What is the average inventory if 10 weeks’ supply is ordered at one time? What is the

order point?

11.4. Given the following data, calculate the average demand and the standard deviation.

11.6. The standard deviation of demand during the lead time is 100 units.

A. Calculate the safety stock required for the following service levels: 75%, 80%, 85%, 90%, 95%,

and 99.99%.

B. Calculate the change in safety stock required to increase the service levels from 75 to 80%, 80 to

85%, 85 to 90%, 90 to 95%, and 95 to 99.99%. What conclusion do you reach?

11.8. A company stocks an SKU with a weekly demand of 225 units and a lead time of 3 weeks.

Management will tolerate one stockout per year. If sigma for the lead time is 175 and the order quantity

is 800 units, what is the safety stock, the average inventory, and the order point?

11.19. A company that manufactures snow shovels has one plant and two distribution centers (DCs).

Given the following information for the two DCs, calculate the gross requirements, projected available,

and planned order releases for the two DCs and the gross requirements, projected available, and

planned order releases for the central warehouse.

11.21. A regional warehouse orders items once a week from a central warehouse. The truck arrives 3

days after the order is placed. The warehouse operates 5 days a week. For a particular brand and size of

chicken soup, the demand is fairly steady at 20 cases per day. Safety stock is set at 2 days’ supply.

A. What is the target level?

B. If the quantity on hand is 90 cases, how many should be ordered?

12.2. A company has 6500 cartons to store on pallets. Each pallet takes 30 cartons, and the cartons are

stored four high. How many pallet positions are needed?

12.4. A company has a warehouse with the dimensions shown in the following diagram. How many

pallets measuring 48″ × 40″ can be stored three high if there is to be a 2″ space between the pallets?

12.6. A company wants to store the following seven SKUs so there is 100% accessibility. Items are stored

on pallets that are stored four high.

A. How many pallet positions are needed?

B. What is the cube utilization?

C. If the company bought racking for storing the pallets, how many pallet positions are needed to

give 100% accessibility?

12.8.

A. Which of the following items are within tolerance?

B. What is the percent accuracy by item?

12.10. A company does an ABC analysis of its inventory and calculates that out of 10,000 items, 19% can

be classified as A items, 30% as B items, and the remainder as C items. A decision is made that A items

are to be cycle counted twice a month, B items every 3 months, and C items once a year. Calculate the

total counts and the counts per day by classification. There are 250 working days per year.

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