00:01
What would be the new service level? so to find our new service level, let's go ahead and write down our givens.
00:06
We have our annual demand as 15 ,000 units.
00:12
So let's call this d.
00:15
Our weekly demand, lowercase d, is 300 units.
00:18
Our standard deviation is nine units, and our lead time is equal to four weeks.
00:25
So our standard deviation for this lead time of four weeks is square root of four times our 90, which is 180 units.
00:38
Now, we can use our 97 % probability.
00:45
We wanna use our excel spreadsheet to solve this.
00:50
We wanna get our value of z.
00:55
So if we do our excel sheet, and we get our value of z, so we wanna find the value of z for 97 % is 2 .17.
01:12
So using that, so z is equal to 2 .17, then r is equal to d times l plus z times our standard deviation.
01:22
We plug in 300 times four plus 2 .17 times a 180 units.
01:33
And so let's go ahead and plug that into a calculator.
01:36
So 300 times four plus 2 .17 times 180, we get 1590 units.
01:44
Now let's find our safety stop, which we'll call ss.
01:48
That's z times our standard deviation.
01:51
So 2 .17 times 180, we end up getting 390 .6 units...