Question: In a continuous review inventory system, the lead time for door knobs is 3 days. The standard deviation of demand per day is 27

In a continuous review inventory system, the lead time for door knobs is 3 days. The standard deviation of demand per day is 27 units and the demand per day is 39 units. The desired cycle-service level is 65 percent. The supplier of door knobs streamlined its operations and now quotes a one-day lead time. How much can safety stock be reduced without reducing the 65 percent cycle-service level? Round/report the safety stock values to two (2) decimal places. Do not round your intermediate calculations. Do not include units. Original Safety Stock New Safety Stock Safety Stock Change

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To calculate the original safety stock and the new safety stock we can use the formula for safety stock SS Z times sqrtL times sigma2 D2 times Ls2 Whe... View full answer

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