Question: A B C D Q . 3 Order Quantity Q 1 , 5 0 0 units Annual demand D 4 0 , 0 0 0
A B C D Q Order Quantity Q units Annual demand D units per year Standard deviation of annual demand sD units per year Mean lead time L years Standard deviation of lead time sL years Type Service Level a Standard deviation of demand during the lead time sDL units per lead time Mean demand during the lead time DL units per lead time Standard normal variate Z Safety Stock SS units
Please consider the demand and lead time information provided. The logistics manager arbitrarily sets the safety stock level to units. What is the instock rate that is achieved in this case?
Hint: You need to work backwards here and compute the value of z that corresponds to a safety stock of units and then convert this value to a type service level as normsdistz
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