Chapter 12, Problem 34P

a)

Summary Introduction

To determine: The Reorder point (ROP) at 90% service level.

Introduction: Inventory management is the process of ordering, storing and using inventory of the company such raw material, components and finished goods. It governs the flow of goods from manufacturers to warehouse and to the point of sale. The key function is to maintain record of flow of new or returned products which enters or leaves the company.

b)

Summary Introduction

To determine: The Reorder point (ROP) at 95% service level.

c)

Summary Introduction

To explain: The services levels and state the preferred service levels.