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    T04 - Kel - 7 - Demand Variable & Lead Time Variable

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    rohmat_setiawan77
    Group 7's assignment includes Muhammad Arifin Julian, Fachryal Hiltansyah, and Rohmat Setiawan. The document discusses reorder point calculation when both demand and lead time are variable, including safety stock and service level. It provides an example problem about a company that stocks Cuban cigars with variable lead times and demand. The problem is solved to find the reorder point for 90% and 95% service levels.

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    T04 - Kel - 7 - Demand Variable & Lead Time Variable

    Uploaded by

    rohmat_setiawan77
    455 views12 pages
    Group 7's assignment includes Muhammad Arifin Julian, Fachryal Hiltansyah, and Rohmat Setiawan. The document discusses reorder point calculation when both demand and lead time are variable, including safety stock and service level. It provides an example problem about a company that stocks Cuban cigars with variable lead times and demand. The problem is solved to find the reorder point for 90% and 95% service levels.

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    Group 7's assignment includes Muhammad Arifin Julian, Fachryal Hiltansyah, and Rohmat Setiawan. The document discusses reorder point calculation when both demand and lead time are variable, including safety stock and service level. It provides an example problem about a company that stocks Cuban cigars with variable lead times and demand. The problem is solved to find the reorder point for 90% and 95% service levels.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    455 views12 pages

    T04 - Kel - 7 - Demand Variable & Lead Time Variable

    Uploaded by

    rohmat_setiawan77
    Group 7's assignment includes Muhammad Arifin Julian, Fachryal Hiltansyah, and Rohmat Setiawan. The document discusses reorder point calculation when both demand and lead time are variable, including safety stock and service level. It provides an example problem about a company that stocks Cuban cigars with variable lead times and demand. The problem is solved to find the reorder point for 90% and 95% service levels.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    ASSIGNMENT 4

    Group 7
    1. Muhammad Arifin Julian (1606879823)
    2. Fachryal Hiltansyah (1606870521)
    3. Rohmat Setiawan (1806244540)
    SUMMARY

    Reorder point when Both Demand and Lead Time Are Variable
    REORDER POINT

    • The level of inventory which triggers an action to replenish that particular


    inventory stock.
    • It is a technique to determine when to order
    • Under deterministic conditions when both demand and lead time are constant,
    the reorder point is set equal to lead time x demand
    • under probabilistic conditions when both demand and lead time varies, the
    reorder point often includes safety stock
    SAFETY STOCK

    • Is the minimum level of inventory that is held as a protection against shortage


    due to fluctuation in demand.
    • It also determine the chance of a stockout during lead time. The complement
    of this chance is called the service level
    SERVICE LEVEL

    • Is the probability of not incurring a stockout during lead time


    • Service level of 90% means that there is a .90 probability that demand will be
    met during lead time and .10 probability of a stockout
    REORDER POINT WHEN BOTH DEMAND
    AND LEAD TIME ARE VARIABLE

    𝑅𝑂𝑃 = Average daily demand ∗ Average lead time in days + Safety Stock
    𝑆𝑎𝑓𝑒𝑡𝑦 𝑆𝑡𝑜𝑐𝑘 = 𝑍 ∗ 𝜎𝑑𝐿𝑇
    Where:
    σd = Standar Deviation of demand per day
    𝜎𝐿𝑇 = Standard Deviation of lead time in days
    PROBLEMS

    Number 12.48
    QUESTION

    Gainesville Cigar stocks Cuban cigars that have variable lead times because of the
    difficulty in importing the product: lead time is normally distributed with an
    average of 6 weeks and a standard deviation of 2 weeks. Demand is also a
    variable and normally distributed with a mean of 200 cigars per week and a
    standard deviation of 25 cigars.
    a. For a 90% service level, what is the ROP?
    b. What is the ROP for a 95% service level?
    c. Explain what these two service levels mean. Which is preferable?
    GIVEN

    • Average daily demand = 200 cigars per week


    • Standard deviation of demand (σd) = 25 cigars per week
    • Average lead time = 6 weeks
    • Standard deviation of lead time (𝜎𝐿𝑇 ) = 2 weeks
    • Service level =
    a. 90%, so Z = 1.282 (from Appendix I or the Excel formula = NORMSINV(.95))
    b. 95%, so Z = 1.645 (from Appendix I or the Excel formula = NORMSINV(.95))
    SOLUTION

    a) A

    𝜎𝑑𝐿𝑇 = 6 𝑥 252 + ( 200 2 𝑥 22 ) = 404,6≈405


    ROP (90%) = (200 X 6) + 1,282( 405) = 1719 cigars
    SOLUTION

    b.) 𝜎𝑑𝐿𝑇 = 6 𝑥 252 + ( 200 2 𝑥 22 ) = 404,6≈405


    ROP (95%) = (200 X 6) + 1,645( 405) = 1866 cigars

    c.) For service level 90%, Reorder Point (ROP) is done when the
    remaining stock is 1719 cigars.
    For service level 95%, Reorder Point (ROP) is done when the
    remaining stock is 1866 cigars.
    We prefer the ROP for service level 95%, because it would be safer if the
    demand of cigars is suddenly rises (in this case both lead time and demand are
    variable).
    THANK YOU!

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