Question: Given that the expected demand during lead time is 600 units, standard deviation of lead time demand is 50 units. (A) Assuming that lead time

Given that the expected demand during lead time is 600 units, standard deviation of lead time demand is 50 units. (A) Assuming that lead time demand is normally distributed, what is the reorder point that will provide a risk of stock-out of 2 percent during lead time?

(b) Assuming that lead time demand is normally distributed, what is the safety stock needed to attain a 2 percent risk of stock-out during lead time?

(c) Assuming that lead time demand is normally distributed. Would a stock-out risk of two percent require more or less safety stock than a 1% risk?

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