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  2. If Roger wants to ensure the probability that he would run out of the equipment is only 2%, what would be the order-up-to level of the equipment?

If Roger wants to ensure the probability that he would run out of the equipment is only 2%, what would be the order-up-to level of the equipment?

QUESTION 1
Roger is playing an online game, and he can only purchase the equipment every Monday morning. Once making a purchase, he immediately gets the gear. The average daily consumption of the equipment is 20 units, and the standard deviation is 3 units. If Roger wants to ensure the probability that he would run out of the equipment is only 2%, what would be the order-up-to level of the equipment?

  • 147
  • 156
  • 151
  • 163

QUESTION 2
A retailer manages the inventory based on a periodic review system with a review period = 5 days and the order-up-to level = 80 units. The retailer can place an order today, and the current on-hand inventory = 0 units, on-order inventory = 40 units, and the backorder = 20 units. What is the quantity for this order?

  • 80
  • 60
  • 20
  • 40

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