Demand is Normally distributed with mean of 6 per week and a weekly variance of 11. The ordering cost is $40.29. Lead time is 2 weeks. Shortages cost an estimated $2.35 per unit short to expedite orders to appease customers. The holding cost is $6.55 per week. Estimate the stockout risk if the target service level is 0.11. (Enter a number with two decimal places, e.g. 0.12).

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Demand is Normally distributed with mean of 6 per week and a weekly variance of 11. The ordering cost is $40.29. Lead
time is 2 weeks. Shortages cost an estimated $2.35 per unit short to expedite orders to appease customers. The holding
cost is $6.55 per week.
Estimate the stockout risk if the target service level is 0.11. (Enter a number with two decimal places, e.g. 0.12).
Transcribed Image Text:Demand is Normally distributed with mean of 6 per week and a weekly variance of 11. The ordering cost is $40.29. Lead time is 2 weeks. Shortages cost an estimated $2.35 per unit short to expedite orders to appease customers. The holding cost is $6.55 per week. Estimate the stockout risk if the target service level is 0.11. (Enter a number with two decimal places, e.g. 0.12).
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