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Weekly demand for Nokia cell phones at a Walmart store is normally distributed, with a mean of 300 and a standard deviation of 200. Nokia takes two...
Weekly demand for Nokia cell phones at a Walmart store is normally distributed, with a mean of 300 and a standard deviation of 200. Nokia takes two weeks to supply a Walmart order. Walmart is targeting a customer service level of 95% and monitors its inventory continuously. When its inventory reaches a specific reorder level, then Walmart places a replenishment order with Nokia. The replenishment order is always a fixed quantity each time.(i) How much safety inventory of Nokia cell phones should Walmart carry? What should its reorder level be?Now the store manager at Walmart has decided to follow a periodic review policy to manage inventory of Nokia cell phones. He plans to order every three weeks.(ii) Given a desired customer service level of 95%, how much safety inventory should the store carry? What should its base stock level be?Please show workings and reference if any.
