Question: Given the following demand information: Average weekly demand = 28 pairs of socks Replenishment leadtime = 2 weeks Standard deviation of demand (weeks) = 8

Given the following demand information:

Average weekly demand = 28 pairs of socks Replenishment leadtime = 2 weeks Standard deviation of demand (weeks) = 8 pairs of socks

1. Assume that the weekly demand is constant. The demand during lead time (DDLT) is equal to:

A. 26 pairs of socks

B. 224 pairs of socks

C. 392 pairs of socks

D. 56 pairs of socks

2. Now assume that the weekly demand does vary and safety stock needs to be considered. A 99% service level is desired which corresponds to a z-score of 2.33. The reorder point should be set at:

A. approximately 26 pairs of socks

B. approximately 83 pairs of socks

C. approximately 56 pairs of socks

D. approximately 64 pairs of socks

3. True/False: An increase in service level would require a decrease in safety stock

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