Question: Given this information Expected demand during lead time 300 units

Given this information: Expected demand during lead time 300 units Standard deviation of lead time demand 30 units Determine each of the following, assuming that lead time demand is distributed normally:
a. The ROP that will provide a risk of stockout of 1 percent during lead time.
b. The safety stock needed to attain a 1 percent risk of stockout during lead time.
c. Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk? Explain. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percent instead of 1 percent? Explain.

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  • CreatedDecember 30, 2014
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