6.)Wilson Inc. produces a 3-week supply of its FIFA World Cup Soccer Ball Model when stock on hand drops to 400 units. It takes 1 week to produce a batch. Orders average 350 units per week, and standard deviation of forecast errors is estimated at 175 units. ROP=400, L=1 week, LTD 350/week, Q=3(350) σ_LTD=175, LTD = N(350, 175). ROP = LTD + Isafety ROP = LTD +z LTD 400= 350+z(175) 50 = 175z z = 50/175 = 0.29, Thus, risk is 61.41% % Is % SL change Z change ROP = LTD +Is σLTD =zσLTD 0.8 100 0.84 175 147 100 497 0.9 113 1.28 175 224 152 574 0.95 119 1.64 175 288 195 638 0.99 124 2.33 175 407 276 757
6.)Wilson Inc. produces a 3-week supply of its FIFA World Cup Soccer Ball Model when stock on hand drops to 400 units. It takes 1 week to produce a batch. Orders average 350 units per week, and standard deviation of forecast errors is estimated at 175 units. ROP=400, L=1 week, LTD 350/week, σ_LTD=175, Q=3(350) LTD = N(350, 175). ROP = LTD + Isafety ROP = LTD +z LTD 400= 350+z(175) 50 = 175z z = 50/175 = 0.29, Thus, risk is 61.41% SL % change Z σLTD Is =zσLTD % change ROP = LTD +Is 0.8 100 0.84 175 147 100 497 0.9 113 1.28 175 224 152 574 0.95 119 1.64 175 288 195 638 0.99 124 2.33 175 407 276 757