18. A newspaper publisher uses roughly 800 feet of baling wire each day to secure bundles of newspapers while they are being distributed to carriers. The paper is published Monday through Saturday. Lead time is six workdays. What is the appropriate reorder point quantity, given that the company desires a service level of 95 percent, if that stockout risk for various levels of safety stock is as follows: 1,500 feet, .10; 1,800 feet, .05; 2,100 feet, .02; and 2,400 feet, .01?
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Answer:
Daily usage = 890 ft./day
Lead time = 5 days
Service level desired: 95 percent.
Hence, risk should be 1.00 – .95 = .05
This requires a safety stock of 1,700 feet.
ROP = expected usage + safety stock = 890*5+1700= 6,150 ft
So answer= 6150 feet
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hiiiiii .may be right
sidhu singh
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