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Excersise 11-4: Hewlett Packard: Inputs

The document describes a case study of Hewlett Packard printer inventory management at a Sam's Club store. Weekly demand is normally distributed with a mean of 250 and standard deviation of 150. The store orders 1000 printers when inventory drops to 600, and it takes HP 2 weeks to fulfill orders. The store carries 100 units of safety inventory and achieves a 68% cycle service level and 96% fill rate.

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346 views2 pages

Excersise 11-4: Hewlett Packard: Inputs

The document describes a case study of Hewlett Packard printer inventory management at a Sam's Club store. Weekly demand is normally distributed with a mean of 250 and standard deviation of 150. The store orders 1000 printers when inventory drops to 600, and it takes HP 2 weeks to fulfill orders. The store carries 100 units of safety inventory and achieves a 68% cycle service level and 96% fill rate.

Uploaded by

akashkr619
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Excersise 11-4: Hewlett Packard

Weekly demand for Hewlett Packard printers at a Sam's Club store is normally distributed with a mean
of 250 and a standard deviation of 150. The store manager continuously monitors inventory and
currently orders a thousand printers each time the inventory drops to 600 printers. Hewlett Packard
currently takes two weeks to fill an order. How much safety inventory does the store carry? What cycle
service level does Sam's Club achieve as a result of this policy? What fill rate does the store achieve?

Inputs
Average demand per unit time R = 250
Lead time, L = 2
SD of demand per unit time sR = 150
Order quantity Q= 1000
Reorder Point 600

Distribution of demand during replenishment lead time


Mean demand during lead time RL = 500
SD of demand during lead time sL = 212

Outputs
Safety Inventory ss = 100
Cycle Service Level CSL = 0.68
Expected shortage per replenishment cycle ESC = 43.86
Fill Rate fr = 0.96

CR - 04/19/2020 03:55:58 Page 1 470967415.xls - VALUES


Excersise 11-4: Hewlett Packard

Weekly demand for Hewlett Packard printers at a Sam's Club store is normally distributed with a mean
of 250 and a standard deviation of 150. The store manager continuously monitors inventory and
currently orders a thousand printers each time the inventory drops to 600 printers. Hewlett Packard
currently takes two weeks to fill an order. How much safety inventory does the store carry? What cycle
service level does Sam's Club achieve as a result of this policy? What fill rate does the store achieve?

Inputs
Average demand per unit time R = 250
Lead time, L = 2
SD of demand per unit time sR = 150
Order quantity Q= 1000
Reorder Point 600

Distribution of demand during replenishment lead time


Mean demand during lead time RL = 500
SD of demand during lead time sL = 212

Outputs
Safety Inventory ss = 100
Cycle Service Level CSL = 0.68
Expected shortage per replenishment cycle ESC = 43.86
Fill Rate fr = 0.96

CR - 04/19/2020 03:55:58 Page 2 470967415.xls - FORMULAS

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