Question: The formula for demand uncertainty with normal demand distribution looks like mu + z * sigma. If SL is >50%, z is a positive values.
The formula for demand uncertainty with normal demand distribution looks like mu + z * sigma. If SL is >50%, z is a positive values. If SL <50%, z is negative.
As we improve forecasting, we find a more precise forecast and therefore reduce the value of sigma. Assuming the SL > 50 percent and therefore z is positive, this reduced sigma results in a __________ in total inventory investment to achieve the same service level.
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