i.Demand Range Model The average daily demand for a particular item is 438 with a standard...

i.Demand Range Model

The average daily demand for a particular item is 438 with a standard deviation of 24. The current policy is to order enough items for 25 days. What is the likely range for that 25-day demand?

Determine the range with a calculation (mean +/- 3 stdev)

Determine the range with a simulation.

Solutions

Expert Solution

Average Daily Demand = 438

STD, = 24

Order quantity = Average lead time demand + 3 = (25*438) +/- (2*24)

Order quantity range (10902,10998)

b.)

Simulation using Excel formula Randbetween(10902,10998). The range is (10904,10998)

1	10934
2	10924
3	10938
4	10974
5	10952
6	10929
7	10904
8	10934
9	10993
10	10997
11	10973
12	10944
13	10982
14	10962
15	10931
16	10907
17	10919
18	10986
19	10993
20	10914
21	10966
22	10960
23	10932
24	10936
25	10937
26	10937
27	10994
28	10990
29	10984
30	10941
31	10996
32	10981
33	10918
34	10911
35	10985
36	10981
37	10950
38	10977
39	10972
40	10920
41	10949
42	10964
43	10908
44	10997
45	10978
46	10932
47	10919
48	10937
49	10924
50	10946
51	10939
52	10906
53	10987
54	10952
55	10924
56	10998
57	10919
58	10998
59	10994
60	10938
61	10904
62	10980
63	10921
64	10910
65	10951
66	10920
67	10950
68	10990
69	10943
70	10910
71	10991
72	10924
73	10963
74	10969
75	10924
76	10921
77	10911
78	10990
79	10962
80	10929
81	10966
82	10928
83	10907
84	10948
85	10989
86	10983
87	10986
88	10991
89	10952
90	10978
91	10955
92	10971
93	10938
94	10990
95	10927
96	10928
97	10960
98	10942
99	10958
100	10934

keosha answered 5 months ago

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