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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Operations Management Managing Global Supply Chains

ISBN: 978-1506302935

1st edition

Authors: Ray R. Venkataraman, Jeffrey K. Pinto

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