1a.
Three pharmacies in a town have to keep a stock of fexofenadine
available for customers. The mean demand for fexofenadine is 1000
pills a day, with a standard deviation of 200 pills. It takes 3
days for the pills to come from the warehouse. Due to demand, each
pharmacy has a service level of 99%
(a) What is the safety stock?
(b) What is the reorder point?
mean demand=1000 pills/day
STD deviation=200 pills
3 days for pills to come from the warehouse
service level 99%
Safety Stock=Z*STD dev*(LT)^.5
SS=2.33*200*sqrt(3)
SS=807.1357
Reorder Point=1000*3=3000
1b.
The aforementioned pharmacies decide to pool their inventory
into one location.
(a) What is the new mean demand and standard deviation for the
drug at the pooled inventory location?
New demand= 3*1000 = 3000 pills/day
New standard deviation= 200*root(3)= 346.41 pills
(b) What is the safety stock?
(c) What is the reorder point?
I got the first part of it down, the second part is confusing to
me. Thank you
