2) Candy Incorporated stocks bubble gum game cards, an item that has a normally

Question

2) Candy Incorporated stocks bubble gum game cards, an item that has a normally distributed demand during the reorder period with a mean of 16 dozen boxes and a standard deviation of four dozen boxes. 1f it is desirable to experience a stockout only 10 percent of the time, what is the appropriate safety stock? (S points) 3) The annual demand for a product is 2,100 units. The company orders 200 units each time an order is placed. The lead-time is 6 days. There are 250 working days per year. If the reorder point is 50, what safety stock are they using? (5 points) 4) Enrollment in a particular class for the last four semesters has been 120, 136, 1115, and 165 (listed fro oldest to most recent). The best forecast of enrollment next semester, based on a three-semester moving verage, would be (5 points)

Explanation / Answer

2) 90% of the time, the stock is sufficient.

Formula: Z = (X-mean)/SD

P(X < x) = 0.9

P(Z < (x-16)/4) = 0.9
Z = 1.28 for 0.9 probability

1.28 = (x-16)/4

x = 21.12 dozen = 253.44 units

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