Jasper’s Grocery places an order for Monster every 15 days. Once the order is pl

Question

Jasper’s Grocery places an order for Monster every 15 days. Once the order is placed, delivery to the store typically occurs in 3 days. Average demand is 5 cases per day and the standard deviation of demand is 1.5 cases per day. The store policy is to stock an amount of inventory that allows for an average stockout condition of 5% (1.65 standard deviations) while waiting for replenishment. It is time to place an order, and there are 20 cases on hand. How mant units should be ordered? Jasper’s Grocery places an order for Monster every 15 days. Once the order is placed, delivery to the store typically occurs in 3 days. Average demand is 5 cases per day and the standard deviation of demand is 1.5 cases per day. The store policy is to stock an amount of inventory that allows for an average stockout condition of 5% (1.65 standard deviations) while waiting for replenishment. It is time to place an order, and there are 20 cases on hand. How mant units should be ordered?

Explanation / Answer

UP=15+ 3

sigma =sqrt (18 * 1.5^2)

Q=18 * 5 + 1.65 * 6.36 -20

Q = 80.5 or 81

or 81

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