This is the inventory solution for the 							
grease cup.									
										
These are the cost parameters associated	Duty is $37.00 CD				
with the calculated inventory.			One US = 1.44 CD				
										
 	 	ITEM	PRICE		 	            Item		Legend		
Retail. sells for		$56.46 US		Safety Stock		S.S.		
Manuf. Sells for		$36.13 US							
Freight			$19.26 US							
Duty			$25.69 US							
 	 	 	 							
										
										
										
These are the Demand and Performance							
parameters.									
 	 	 	 	 	 	 				
Performance   Probability	Demand	Probability	    S.S.		 
 	 	 	 	 	 					
17	45%	7.65	1	5%	0.05	           10.27			
20	32%	6.40	3	15%	0.45					
22	10%	2.20	8	25%	2.00					
25	6%	1.50	9	35%	3.15					
29	4%	1.16	11	10%	1.10					
30	3%	0.90	13	10%	1.30					
	Mean	19.81		Mean	8.05					
										
Approximating Normal Distribution from skewed data (Poisson) the revised mean is equal to 19.31.	
										
										
										
										
										
										
										
These are the Standard Deviations of Demand and Performance:				
										
Units	Di	Di**2	Fi	FiDi**2	N=1	Days	Di	Di**2	Fi	FiDi**2
 	 	 	 			 	 	 	 	 
1	-7	49	0.05	2.45		17	-2.31	5.33	0.45	2.39
3	-5	25	0.15	3.75		20	-0.69	0.476	0.32	0.149
8	0	0	0.25	0		22	2.69	7.23	0.1	0.723
9	1	1	0.35	0.35		25	5.69	32.37	0.06	1.94
11	3	9	0.1	0.9		29	9.69	93.89	0.04	3.75
13	5	25	0.1	2.5		30	10.69	114.27	0.03	3.42
			total	9.95					total	12.372
σ (SD)	=	√∑FiDi²/N	=	3.15		σ (SD)	=	√∑FiDi²/N	=	3.51
										
Calculate the total combined Standard Deviation						
from Power Point Presentation: 							
= sqrt(31.17-26.38+853.02)= 29.28 or 30 units							
										
Average for the combined distribution: = 19.31 x 8.05 = 155.44					
If Q the order quantity was 300 units							
(SL)fill rate= 99%									
F(k) = ( 1-SL) x Q/σ₁₊₂ = (1-.99) x 300/29.28 = .102						
										
k = 0.3509										
										
Therefore the Safety Stock = 29.28 x .3509= 10.27  Units