Question: Variability i n Transit Time You have t o select a transportation carrier t o use for replenishing your inventory. Demand for the item i

Variability in Transit Time
You have to select a transportation carrier to use for replenishing your inventory. Demand for the item is distributed Normally with a mean of500 units and a standard deviation of100 units per week. The cost of the item to include delivery is $450. You want a CSLof95%.
Option 1: Delivery leadtime mean=4 weeks, StdDev =1 week
Option 2: Delivery leadtime mean=4 weeks, StdDev =0.5 week
Option 3: Delivery leadtime mean=3 weeks, StdDev =1 week
Q1: Suppose you decide to use Option 1? What is the average safety stock in items? Enter your answer rounded UPto the nearest integer.
Q2: Suppose you decide to use Option 2?What is the average safety stock? Enter your answer rounded UPto the nearest integer.
Q3: Suppose you decide to use Option 3? What is the average safety stock? Enter your answer rounded UPto the nearest integer.
Q4: You have noticed how much impact that reliable transportation (lead) time has on your safety stock levels. You want to understand how much more reliable Option 3(3 weeks average and 1 week standard deviation) would need tobeto match the safety stock needed in Option 2. What would Option 3's new standard deviation of transit time need tobeto have the same safety stock level asin Option 2? Enter your answer as a decimal.
 Variability in Transit Time You have to select a transportation carrier

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