operations management (inventory managment)

[Khb_taylors]

The injection moulding department of a company uses an average of 30 litres of special lubricant a day. the supply of the lubricant is replenished when the amount on hand is 170 litres. it takes four days for an order to be delivered. The current stockout risk is 9 percent. what amount of safety stock would be needed if this acceptable risk of stockout is to be reduced to 3 percent?

Given:
average demand rate is 30 litres
LT = 4 days
service level: 100 - 0.09 = 0.91
z = 1.32

don't know which one should i use?

 

[tkhunny]

Usage for 4 days

\(\displaystyle \mu = 120\)

Distribution is Poisson.

Stockout 0.09 can't be exact. Retaining 134 l produces 0.095 and retaining 135 l produces 0.082

Anyway, reducing to under 0.03 requires 141 (giving 0.027)

That's the trick with discrete distributions. It's difficult to hit desired values exactly.