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Demand for iron ore averages 50 tons/day, with a standard deviation of 5 tons and a lead time of 7 days. The manager is willing
Demand for iron ore averages 50 tons/day, with a standard deviation of 5 tons and a lead time of 7 days. The manager is willing to accept a stockout risk of no more than 3% (so avg. CSL = 97%). What's the ROP? Safety stock = Z * std.dev. of demand * (sq root of lead time) ROP = Avg usage during LT + SS A.375 tons approx. B.4000 tons approx. C.3300 tons approx. D.400 tons approx.
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