Suppose the inventory manager at the ABC company is concerned about combined variability in sales and lead time for one of its line of products and has provided you with the following sales data:

Mean Sales (S)= 20 unit, with a standard deviation of 3.0

Mean Leadtime (R) = 10 days, with a standard deviation of 2.0

The manager plans to order on the basis of EOQ. Assume EOQ= 300 units

What is the one standard deviation of safety stock for ABCs line of product. (Note: you may us the convoluted formula for this question)

a. approximately 1690 units

b. approximately 60 units

c. approximately 40 units

d. 110 units

Given the information above, and assuming that ABC wants to keep 4 days of sales in safety stock, the safety stock factor under this policy is 1.6. True or False

Given the information above, what is the fill-rate under this new inventory policy?

- Under 98%

- over 98%

Given the information above, what is the Lows reorder point under uncertainty?

- significantly more than 240 units

- approximately 240 units

- significantly less than 240 units

Given the information in above, ABC average inventory will be approximately 150 units. True/False

Lastly, if ABC were to increase safety stock from 4 days of sales to 10 days of sales, under currenty inventory policy (EOQ), the safety stock factor will increase. True/ False