Given this information:

Expected demand during lead time = 330 units

Standard deviation of lead time demand = 38 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.)

ROP____?____Units.

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.)

Safety Stock_____?____ Units

c-1. Would a stockout risk of 3 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 3 percent instead of 1 percent?

multiple choice 2

• Unaffected

• Larger

• Smaller

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