Question: 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

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 of 500 units and a standard deviation of 100 units per week. The cost of the item to include delivery is $450. You want a CSL of 95%.
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 UP to the nearest integer. [result: 886]
Q2: Suppose you decide to use Option 2?
What is the average safety stock? Enter your answer rounded UP to the nearest integer. [result: 527]
Q3: Suppose you decide to use Option 3?
What is the average safety stock? Enter your answer rounded UP to the nearest integer. [result 871]
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 to be to match the safety stock needed in Option 2.
What would Option 3's new standard deviation of transit time need to be to have the same safety stock level as in Option 2? Enter your answer as a decimal.

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