What amount of safety stock is appropriate? what risk of, Ask an Expert

Management Studies

Given this information:
Lead-time demand = 630 pounds
Standard deviation of lead time demand = 40 pounds (Assume normality.)
Acceptable stockout risk during lead time = 4 percent

a.
What amount of safety stock is appropriate?
b.
When should this item be reordered?
c. What risk of stockout would result from a decision not to have any safety stock?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M9380078

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