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compute the required Reorder Point (ROP).

Open Posted By: ahmad8858 Date: 16/10/2020 Graduate Case Study Writing

 compute the required Reorder Point (ROP). 

Category: Arts & Education Subjects: Education Deadline: 12 Hours Budget: $120 - $180 Pages: 2-3 Pages (Short Assignment)

Attachment 1

ROP example

Reorder Point with Safety Stock
But what if demand isn't constant?
But what if delivery isn't reliable??
Daily demand (average) DD = units/day Historical Data
Standard deviation of Demand = units/day Daily Demand (units) Length of each replenishment cycle (days)
80 12
Length of replenishment cycle (average) = RC = days 85 12
Standard deviation of Replenishment Cycle = days 75 11
70 13
Service level target = 95% 78 12
z = 1.644853627 83 12 When demand is uncertain (always) and replenishment cycle is uncertain (always).
88 13
Reorder Point without Variability = units 93 12
+ 95 13
Safety Stock (to buffer from variability) = SS = units 94
= 90
Reorder Point (in the real world!) = ROP = units 83
(round to the nearest unit) 90
85
95
80
Extra: How much more would it cost to increase Safety Stock to reach a 97% Service Level? To reach 99% Service Level?

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