For MT237 Unit 5, the inventory calculation prices safety stock for imported lift columns at five service levels, with and without shipment visibility, and keeps the cheapest total. Searches like "mt 237 unit 5 assignment example", "mt237 unit 5 sample" and "mt237 unit 5 example" land here.
What a finished MT237 Unit 5 inventory calculation looks like
Four pages: an inputs box, two tables and a closing paragraph. Inputs are weekly demand of 936 sets with a standard deviation of 210, a nine-week lead time varying by 1.6 weeks, a container order every four weeks, a $118 unit cost carried at 22 percent a year, and $142 of margin lost per set short. Protection runs over thirteen weeks, giving a standard deviation near 1,678 sets, of which lead-time variation contributes 1,498 and demand 757. The first table sets holding cost against expected shortage cost at 90, 95, 97 and 99 percent and at a critical ratio of 0.986; totals fall from $197,000 to about $110,400 at 3,668 sets. The second assumes visibility narrows lead-time variation to half a week: 1,946 sets, about $58,500.
How a MT237 Unit 5 example is structured
Inputs are gathered before any formula, each with its source, because a reader checking the arithmetic needs them in one place. The safety stock formula chosen is the one combining demand and lead-time variation, and the reason is given: with a nine-week ocean lead time, the demand-only version would understate protection by half. The standard deviation is then split into its two parts, and that split carries the argument, since it shows which source of uncertainty the firm is paying to cover. Holding cost and expected shortage cost are computed side by side for each service level, so the choice follows the lowest combined cost, not a familiar percentage. The critical ratio confirms the minimum. A second table changes one input, lead-time variation, to show what shipment information is worth before any later unit prices a way to get it.
Inputs in one box
Demand, its variation, lead time, its variation, review period, unit cost, carrying rate and lost margin sit together with a source for each. Lead-time variation comes from two years of arrival dates, not from the supplier's quoted range.
Two sources of uncertainty, split
Over a thirteen-week protection interval, demand variation contributes about 757 sets and lead-time variation about 1,498. The firm is buying protection mostly against not knowing when containers will arrive.
Holding against running short, five times
At each service level the table multiplies safety stock by $25.96 a year and expected shortages by $142. Totals fall steeply up to 97 percent and flatten after it, bottoming near $110,400.
Critical ratio as a cross-check
Margin lost per set, set against the carrying cost of holding one set through a four-week cycle, gives a critical ratio of 0.986, the same service level at which the cost table bottoms out.
The same table, with shipments seen
If visibility narrowed lead-time variation to half a week, the cheapest level would need 1,946 sets and cost about $58,500. The gap, near $51,800 a year, is presented as the value of information, not yet as a proposal.
Where marks go in MT237 Unit 5
Treating 95 percent as the answer because it is the textbook default, with no shortage cost behind it, is the weakness graders flag most often in this calculation. Using the demand-only formula when lead time varies understates safety stock badly for an imported part, and MT237 instructors look for that choice to be defended. Unit errors cost marks as well: weekly demand paired with a lead time in days, or a yearly holding rate charged against a monthly quantity, and every later figure drifts. Papers reporting a safety stock with no cost attached leave the drawer's trade-off unexamined. The calculation should inform a decision, not replace it, so stopping at a number without saying which level to hold and why misses the last step. Stated assumptions about lost sales, rather than hidden ones, earn credit.
Get a MT237 Unit 5 example written to your instructions
Share the demand figures, lead times and costs your Unit 5 case provides, or describe a part your employer brings in from abroad, together with the rubric. Back within 24-48h comes a first custom calculation, free, with every input sourced and each service level priced. Where no shortage cost is given, a stated estimate stands in and can be swapped.
MT237 Unit 5 questions, answered
Which safety stock formula applies when lead time varies?
The combined form, which adds demand variation over the lead time to the effect of lead-time variation on average demand, then takes the square root. For a locally sourced part with a steady lead time, the demand-only version is close enough. For an imported part the difference is large, and many instructors expect the choice of formula to be justified in a sentence.
How is a service level chosen rather than assumed?
By pricing both sides. Holding more stock costs a carrying rate on every extra unit; running short costs lost margin or expediting on every unit missed. Comparing totals across several levels, or using the critical ratio, shows where the two balance. The example lands near 98.6 percent because a lost desk sale costs far more than a year of storage.
What is the critical ratio?
The cost of being short one unit divided by the sum of that cost and the cost of holding one unit too many over the period. The result is the probability of not running out that minimizes expected cost. It offers a quick check on a cost table and makes the logic behind a high or low service level visible to a reader.