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

Management Studies

Lead-Time demand = 600 pounds
Standard deviation of lead time demand = 52 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.:- M986295

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