Fixed-order-interval. This type of problem can be recognized when an order interval is given (e.g., inventory is ordered every 10 days) along with the demand rate, lead time, and quantity on hand at order time. Use Formula 13-20 to find the optimal order size. A lab orders a number of chemicals from the same supplier every 30 days. Lead time is five days. The assistant manager of the lab must determine how much of one of these chemicals to order. A check of stock revealed that eleven 25-milliliter (ml)jars are on hand. Daily usage of the chemical is approximately normal with a mean of 15.2 ml per day and a standard deviation of 1.6 ml per day. The desired service level for this chemical is 95 percent.
Amount to order = Expected demand during protection interval + Safety stock – Amount on hand at reorder time
= \bar{d} (OI+LT)+z\sigma _d\sqrt{OI+LT} -A (13–20)
a. How many jars of the chemical should be ordered?
b. What is the average amount of safety stock of the chemical?
