Previous 6 Months of Demand: 8, 12, 6, 7, 13, 8
Order Cycle: 1 Month
Lead Time: 2 Months
Target Service Level: 95%
Unit Cost: $5.00
Order Cost: $2.00
Carry Rate: 20%
Begin by choosing what you want to order this month. Notice the demand field is empty for this month because, like normal buying, you do not know what the demand will be before you complete this month. This month is ‘completed’ when you place a value in the Order field and press Submit or press Enter.
What you order this month will not come until Month 3 (2 month lead time). Reminder, you are starting with 31 units on hand and will have no receipts until Month 3 if you place an order this month. The 31 starting on hand will not count against you and will be guaranteed enough to get you through to Month 3.