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08 Practice Problems 1

The document contains practice problems for stochastic inventory models, focusing on calculating cycle service levels, fill rates, safety stocks, target inventories, and order quantities based on given demand and lead time parameters. It includes specific scenarios with defined statistical distributions and inventory conditions. A grading rubric is provided to evaluate the completeness and correctness of the solutions to the problems.

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Trishia reyes
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26 views1 page

08 Practice Problems 1

The document contains practice problems for stochastic inventory models, focusing on calculating cycle service levels, fill rates, safety stocks, target inventories, and order quantities based on given demand and lead time parameters. It includes specific scenarios with defined statistical distributions and inventory conditions. A grading rubric is provided to evaluate the completeness and correctness of the solutions to the problems.

Uploaded by

Trishia reyes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BM2402

PRACTICE PROBLEMS FOR STOCHASTIC INVENTORY MODELS


1. The daily demand for an item is 20 units. The procurement lead time for the item is ten (10) days, and the
standard deviation of the demand during the lead time is 12 units. Determine the cycle service level if the
reorder level is 213 units.
2. The daily demand for an item is 20 units. The procurement lead time for the item is ten (10) days. The
standard deviation of the lead time demand is 12 units. Determine the fill rate if an order for 300 units is
placed each time the inventory falls to 213 units.
3. Weekly demand for a certain item at a firm follows a normal distribution with a mean of 50 units and a
standard deviation of five (5) units. The optimal review period is three (3) weeks, while the lead time is
constant at two (2) weeks. The firm wants to ensure there is no stockout 95% of the time during the lead
time. Compute the safety stock, target inventory, and order quantity if there are 58 units in the store at the
time of review.
4. Weekly demand for a certain item at a firm follows a normal distribution with a mean of 200 units and a
standard deviation of 50 units. The optimal review period is four (4) weeks, while the lead time is constant
at three (3) weeks. If the firm wants to ensure a cycle service level of 98%, compute the safety stock,
maximum inventory, and the order quantity if there are 100 units in store at the time of review.
Rubric for grading (4 items x 5 points):
CRITERIA POINTS
Complete solution with the correct answer 5
The last two major steps of the solution are incorrect 4
Half of the solution is correct 3
The first two major steps of the solution are correct 2
The first major step of the solution is correct 1

08 Practice Problems 1 *Property of STI


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