Probabilistic Model Exercise

Assume the demand is for day and the lead time is one day, also follows a normal distribution during the lead time: N (2000, 250).

1. The company decided to have a ROP of 2200, what is the probability is lower than 2200?

Answer:
ROP = 2200, 2200 = 2000 + SS, SS = 200, 200 = 250z, Z = 0.8 implies P = 78.81%. The probability is 78.81%.

Answer:
ROP = 2300, 2300 = 2000 + SS, SS= 300, 300 = 250z
Z = 0.88 implies P = 88%. The probability is 1-0.88 = 12%.

By: Lorena Úbeda González

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