Timbuk2 Inc. manufactures over 100,000 different versions of messenger bags. Sup

Question

Timbuk2 Inc. manufactures over 100,000 different versions of messenger bags. Suppose Timbuk2 implements an order-up-to model to manage its inventory of a particular plastic buckle. The lead time to receive these buckles is three weeks. Demand is approximately normally distributed with a mean of 2300 units per week and a standard deviation of 1300. Each week’s demand is independent of the demand in the other weeks.

You are in charge of inventory for these plastic buckles and it is time to place your weekly order. You notice your inventory level is at 5000, you have none on backorder and you have 6900 buckles in your pipeline inventory. Assume Timbuk2 operates with an order-up-to level of 15,000.

How many buckles do you order?

Explanation / Answer

Calculate the number of buckles that should be ordered.

Inventory position = On order inventory + Inventory level

                              = 15,000 + 5,000

                              = 20,000

Hence, one wold order 20,000 buckles.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.