QUESTION 14

Scenario 9.12 Demand = 100,000 units/year Number of days per year = 250 weeks Standard deviation of weekly demand = 50 units Average lead time = 5 days Standard deviation of lead time: 2 days Cycle-service level = 99% A continuous review system is used to control inventory. Use the information in Scenario 9.12. What safety stock should the firm use for this product?

		greater than 2,500 units
		greater than 1,500 units but less than or equal to 2,500 units
		greater than 0 but less than or equal to 500 units
		greater than 500 units but less than or equal to 1,500 units