Mulitple order/production opportunities and formulas

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Refer to the formulas given in the Multiple Order/Production Opportunities of the Module Five lecture document: safety stock, reorder level, order quantity, and average inventory level.

1.      Discuss what happens to the average inventory level if the demand uncertainty is high. (Your response must include the formula for the average inventory level.)

2.      Discuss what happens to the reorder level if the lead time is long. (Your answer must include the formula for the reorder level.)

3.      Discuss what happens to the order quantity and the average inventory level if the ordering cost is high. (Your answer must include the formulas for the order quantity and the average inventory level.)

Discuss what happens to the average inventory level if the desired service level is high. (Your answer must include the formula for the average inventory level.)

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