a.Brown also considered whether it was possible to fit a normal probability distribution to the historical demand.

**i.**What are the mean and standard deviation of the demand for the SKU? (The normal distribution is completely specified once the mean and standard deviation are known.)

**ii.**Generate a histogram of the observed demand values for the Great White …

**iii.**Compare the cumulative frequencies of your histogram with those of the histogram of a normal distribution with mean 40 and standard deviation 20 shown in **Exhibit 1**. (The histogram is also copied into columns Q – S in the Analysis #2 worksheet.) Comment on the fit of the normal distribution to the demand for great white.

b.The inverse cumulative function of a demand distribution takes an in-stock rate and returns the order-up to-point that gives this in-stock rate.1 Create a table of order-up-to points for given in-stock rates

c.Construct a table of fill rates given inventory order points…

d.Calculate the order-up-to point that has in-stock rate just greater than or equal to the critical fractile described in #1(b-iii) using the method described in Analysis #2(b).

0 comments