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The weed killer company uses (i.e. demand rate) 30 gallons of weed kill per day. The supply of weed kill is replenished when the amount
The weed killer company uses (i.e. demand rate) 30 gallons of weed kill per day. The supply of weed kill is replenished when the amount on hand is 200 gallons (i.e. reorder point). | |||||||||||||||
After an order is placed, it takes about 5 days on average to receive the order. Safety stock is 50 gallons, which provides a stockout risk of 9.01%. | |||||||||||||||
What amount of safety stock would provide a stockout risk of 2.05%? Assume the lead time is distributed normally; therefore, the lead time will have a standard deviation that you need | |||||||||||||||
to initially solve for. |
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