| Consider the following data. |
| Inventory Item Average Demand (Annual) Sigma (Std. Dev.) of Demand During Lead Time Item Unit Cost |
| F-11001 15,000 100 $250.00 |
| K-12002 100,000 300 $2.00 |
| L-13003 250,000 200 $0.20 |
| N-14004 300,000 400 $1.00 |
| P-21001 50,000 60 $125.00 |
| S-22002 80,000 75 $30.00 |
| Note: All items are independent demand items. |
| Based on the above data: |
| • Calculate the safety stock quantities and the inventory cost associated with safety stock (based on the item unit cost) for the inventory items at four different service levels (50%, 80%, 90%, and 95%). |
| • Develop a table to present the inventory quantities and the safety stock costs at each service level. |
| • Assuming that demand occurs at a steady pace every month (in other words, there is no seasonality or cyclical change in the level of demand), calculate the reorder point for each item assuming a lead time of two months and a service level of 90%. |
| Develop a table to present the reorder points for all products under these conditions (two month lead time and service level of 90%). |
| Support your responses with examples. |
| Needs to have in-text citations and complete reference list. The paper, in-text citations, and reference list needs to be in APA format. No plagiarism. |
| Assignment 2 Grading Criteria Maximum Points |
| Developed a table showing the safety stocks, and inventory costs associated with the safety stocks, for each product at each service level. 30 |
| Developed a table showing the reorder points for each product at a 90% service level (assuming a two month lead time). 15 |
| Used correct spelling, grammar, and professional vocabulary. Cited all sources using APA format. 5 |
| Total: 50″ |
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