Question: Given this information: Expected demand during lead time = 2 7 5 units Standard deviation of lead time demand = 1 4 units Use Table.

Given this information:
Expected demand during lead time =275 units
Standard deviation of lead time demand =14 units
Use Table.
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. (Round your answer to the nearest whole number.)
b. The safety stock needed to attain a 1 percent risk of stockout during lead time. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
c-1. Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk?
multiple choice 1
Less
More
c-2. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percent instead of 1 percent?
multiple choice 2
Smaller
Unaffected
Larger

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