Mountain Mouse makes freeze-dried meals for hikers. One of Mountain Mouse\'s big
ID: 421676 • Letter: M
Question
Mountain Mouse makes freeze-dried meals for hikers. One of Mountain Mouse's biggest customers is a sporting goods superstore. Every 14 days, Mountain Mouse checks the inventory level at the superstore and places an order to restock the meals. These meals are delivered by UPS in 6 days. Average demand during the reorder period and order lead time is 110 meals, and the standard deviation of demand during this same time period is about 9 meals. Click the icon to view the table of z values. a. Calculate the restocking level for Mountain Mouse. Assume that the superstore wants a 90% service level. What happens to the restocking level if the superstore wants a higher level of service-say, 99%? The restocking level for the 90% service level is meals. (Enter your response rounded up to the next whole number) i More Info 1 Resulting service level (%) 90 95 z value 1.28 1.65 2.33 3.08 99.9Explanation / Answer
To be noted:
Protection period, P = Reorder period + Lead time = 14 + 6 = 20 days
Therefore , average demand during protection period = 110 meals ( given )
Z value at 90 % service level = 1.28
Standard deviation of demand during protection period = 9 meals ( given )
Therefore , safety stock to be maintained
= Z value x Standard deviation of demand during lead time
= 1.28 x 9
= 11.52 ( 12 rounded to next higher whole number )
Therefore restocking level at 90% service level
= Average demand during protection period + safety stock
= 110 + 12
= 122
RESTOCKING LEVEL AT 90% SERVICE LEVEL = 122 MEALS
Z value for 99% service level = 2.33
Standard deviation of demand during protection period = 9 meals ( given )
Therefore , safety stock required = 2.33 x 9 = 20.97 ( 21 rounded to next higher whole number )
Therefore,
Restocking level at 99% service level
= Average demand during protection period + Safety stock
= 110 + 21
= 131 meals
RESTOCKING LEVEL AT 99% SERVICE LEVEL = 131 MEALS
RESTOCKING LEVEL AT 90% SERVICE LEVEL = 122 MEALS
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