Asked by Fatmata Isha Bah

As the owner of Wildstyle Music you would like to develop an inventory ordering
policy which has at most a 10% probability of stocking out. Expected demand for
professional mixing headphones is 2190 per year. The store is open 365 days per year.
Every two weeks inventory is counted and a new order is placed. It takes 10 days for
the headphones to be delivered. Standard deviation of demand for the headphones
is 7 per week. There are currently 65 pairs of headphones in the store.
(a) (6 points) How many headphones should you order? (Hint: calculate the mean
and standard deviation of the daily demand first.)

Answers

Answered by Anonymous
a) D = 2190 per year,
μd = Daily Demand = 2190/365 = 6 pairs per day,
T = time between orders (review) = 14 days,
L = Lead time = 10 days
σd=Standard deviation of daily demand = σw/ 2.64 per day,
σLD+T= .I = Current Inventory = 65 pairs,
Service Level P = 90%
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