Question: The average weekly demand for a spare part is 100 units, and the standard deviation of the weekly demand is 30 units. The manager uses
The average weekly demand for a spare part is 100 units, and the standard deviation of the weekly demand is 30 units. The manager uses the continuous-review inventory model for making replenishment decisions. If the standard deviation of weekly demand increases (while everything else stays the same), which of the following will happen? 1. On average, the ordering frequency may or may not increase. 2. On average, the ordering frequency will increase 3. On average, the ordering frequency will decrease 4. On average, the ordering frequency will not change
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
