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Question 12.SP.9: The demand at Arnold Palmer Hospital for a specialized surge...

The demand at Arnold Palmer Hospital for a specialized surgery pack is 60 per week, virtually every week. The lead time from McKesson, its main supplier, is normally distributed, with a mean of 6 weeks for this product and a standard deviation of 2 weeks. A 90% weekly service level is desired. Find the ROP.

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Here the demand is constant and lead time is variable, with data given in weeks, not days. We apply Equation (12-16):
ROP = (Weekly demand × Average lead time in weeks) + Z(Weekly demand)\sigma_{LT}
where \sigma_{LT} = standard deviation of lead time in weeks = 2
So, with Z = 1.28, for a 90% service level:
ROP = (60 × 6) + 1.28(60)(2)
= 360 + 153.6 = 513.6 ≅ 514 surgery packs

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