Problem 3. Given this information:

E[LTD]= 300 units, st.dev.(LTD)= 30 units

Determine each of the following, assuming that LTD is distributed normally:

a. The ROP that will provide a risk of stockout of 1 percent during lead time.

b. The safety stock needed to attain a 1 percent risk of stockout during lead time.

c. Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk? Explain. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percent instead of 1 percent? Explain

Problem 3. Given this information: E[LTD]= 300 units, st.dev.(LTD)= 30 units Determine each of the following, assuming that LTD is distributed normally: a. The ROP that will provide a risk of stockout of 1 percent during lead time. b. The safety stock needed to attain a 1 percent risk of stockout during lead time. c. Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk? Explain. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percent instead of 1 percent? Explain