Question: Given this information: Lead-time demand = 560 pounds The standard deviation of lead time demand = 37 pounds (Assume normality.) Acceptable stockout risk during lead

Given this information:

Lead-time demand = 560 pounds

The standard deviation of lead time demand = 37 pounds (Assume normality.)

Acceptable stockout risk during lead time = 3 percent

Use Table.

  1. What amount of safety stock is appropriate? (Round your answer to the nearest whole number.)

Safety stock _______units

  1. How much of this item should be reordered? (Round your answer to the nearest whole number.)

Rop ________units

  1. What risk of stockout would result from a decision not to have any safety stock? (Omit the "%" sign in your response.)

Stockout risk ________%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!