1. The daily demand for a part is normally distributed with mean of 100 and standard deviation of 10 and no safety stock is maintained. The result is:

a.Stockouts will occur 50% of the time during the lead time.

b.There will not be any stockouts during the lead time.

c.The entire demand during the lead time will be satisfied.

d.Exactly half of the demand during the lead time will be satisfied.

Some helpful calculations below,

Mean Demand: D These are used below extensively. Demand Standard Deviation: SP, Re-Order Point (ROP) ROP = D + 2 * SD, Safety Stock Safety Stock = ROP - D The stock intended to "cover" unfixed demand during the restock process (could Safety Stock - 2 . SP, be manufacturing lead-time, etc.). The second equation makes more sense to use and soves a silly step! Q (Order Up To Level). This is based on the demand and the POU for a given problem. The v POU term is added to convert the SDo to the entire POU. If you recall, variance is standard deviation squared; you multiple your demand variance by the POU Q = (D) . (POU) + (2) (VPOU) . (stdev of demand per period) to get the variance over the entire POU, mathematics allow you to split this out the way the equation is setup. I did a video on this posted on Workplace as a proof. Average Pipeline Inventory Amount average pipeline = D . L