Question: In a continuous review inventory system, the lead time for door knobs is 6 months. The standard deviation of demand per month is 30 units

In a continuous review inventory system, the lead time for door knobs is 6 months. The standard deviation of demand per month is 30 units and the demand per month is 50 units. The desired cycle-service level is 90 percent. The supplier of door knobs streamlined its operations and now quotes a one-month lead time. How much can safety stock be reduced without reducing the 90 percent cycle-service level?

Original Safety Stock:

New Safety Stock:

Safety Stock Change:

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