Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

One item a computer store sells is supplied by a vendor who handles only that item. Demand for that item recently changed, and the store

One item a computer store sells is supplied by a vendor who handles only that item. Demand for that item recently changed, and the store manager must determine when to replenish it. The manager wants a probability of at least 96 percent of not having a stockout during lead time. The manager expects demand to average a dozen units a day and have a standard deviation of two units a day. Lead time is variable, averaging four days with a standard deviation of one day.

What is the corresponding safety stock level to achieve this stockout rate?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

General And Industrial Management

Authors: Henri Fayol, Constance Storrs

1st Edition

1614274592, 978-1614274599

More Books

Students also viewed these General Management questions