The annual demand for inventory item XX67J is 6000 units. Order lead time is 6 workdays, and
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The annual demand for inventory item XX67J is 6000 units. Order lead time is 6 workdays, and the firm's "year" is 300 days (6 workdays weekly, times 50 weeks). Empirical analysis indicates that the daily standard deviation of XX67J demand is 4 units. If the firm desires only a 5% chance of a stock-out, during any inventory cycle. What is the corresponding safety stock level (rounded to the nearest integer)?
a. 8
b. 16
c. 18
d. 40
e. None of the above
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Related Book For
Operations Management Managing Global Supply Chains
ISBN: 978-1506302935
1st edition
Authors: Ray R. Venkataraman, Jeffrey K. Pinto
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