You are the store manager for a Bomberland store. One of your products is a study desk. This desk comes in two colors: maple and cherry. Weekly demand for each desk color follows a Normal distribution with mean 100 and standard deviation 50. The demands for the two colors are independent. You order inventory replenishments weekly, the lead-time from your supplier is 3 weeks and your supplier is quite reliable, i.e., you always receive your entire order in three weeks. You use the order up-to model to decide your order quantities.


24. Suppose your order up-to level S is 400 for maple. After receiving your weekly delivery from your supplier at the beginning of a week, you note that you have 250 units of the maple desk on-hand, 100 maple desks still on-order and no maple desks backordered. How many maple desks will you order this week?

a. 0

b. 50

c. 100

d. 150

e. 200

25. Suppose your order up-to level is 500 for maple desks. With a 3-week lead time, what is your expected ending inventory of maple desks? Choose the closest number.

a. 98

b. 108

c. 208

d. 308

e. 408

26. If the order-up-to level for maple is S = 500, what is the approximate fill rate?

a. 92.00%

b. 95.00%

c. 98.75%

d. 99.56%

e. 100.00%

27. Suppose the ordering cost for maple desk is $100 and the unit holding cost is $5 per day. If there are 5 working days each week, the length of the review period using the economic order quantity model is (Hint: use the economic order quantity in Chapter 7 to figure out the length of a review period. The review period is the average flow time of one order cycle.)

a. Less than 1 day

b. Between 1 day and 2 days

c. At least a week

d. Two weeks or longer

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