Acompanyuses85circuitboardsadayinamanufacturingprocess.Thepersonwhoorderstheboar

Question

Acompanyuses85circuitboardsadayinamanufacturingprocess.Thepersonwhoorderstheboards follows this rule: Order when the amount on hand drops to 625 boards. Orders are delivered approxi- mately six days after being placed. The delivery time is normal with a mean of six days and a standard deviation of 1.10 days. What is the probability that the supply of circuit boards will be exhausted before the order is received if boards are reordered when the amount on hand drops to 625 boards? What is the service level the current policy provides?  

What is the right inventory model for this problem?

a. single period model

b. eoq model

c. fixed interval model

d. rop model

Explanation / Answer

The right inventory model for this problem is

d. rop model

In this model the products are reordered when the stock goes below a particular amount and we can see that in the problem that reorder is done when the amount in hand drops to 625.

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