Question: To answer this question you will need to use the table below ... Suppose we have decided that an acceptable risk of a stockout for

To answer this question you will need to use the table below ...

Suppose we have decided that an acceptable risk of a stockout for Inventory item Delta is 3.59%. Demand for Delta is normally distributed, with a mean equal to 700 units and a standard deviation equal to 40 units. Until very recently, lead time for Delta was equal to 6 days, but our vendor has now told us that lead time for Delta will be increasing by 2 days. How much more safety stock will we need to carry? (Round to 2 decimal places)

Z G(Z) Z G(Z) Z G(Z) Z G(Z)
0.25 0.5987 0.75 0.7734 1.25 0.8944 1.75 0.9599
0.30 0.6179 0.80 0.7881 1.30 0.9032 1.80 0.9641
0.35 0.6368 0.85 0.8023 1.35 0.9115 1.85 0.9678
0.40 0.6554 0.90 0.8159 1.40 0.9192 1.90 0.9713
0.45 0.6736 0.95 0.8289 1.45 0.9265 1.95 0.9744
0.50 0.6915 1.00 0.8413 1.50 0.9332 2.00 0.9772
0.55 0.7088 1.05 0.8531 1.55 0.9394 2.05 0.9798
0.60 0.7257 1.10 0.8643 1.60 0.9452 2.10 0.9821
0.65 0.7422 1.15 0.8749 1.65 0.9505 2.15 0.9842
0.70 0.7580 1.20 0.8849 1.70 0.9554 2.20 0.9861

Correct Answer

27.28

I need steps to get to the answer

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!