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Brief write-up explaining the correlation

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The fact that increasing fill rate increases the amount of safety inventory and the higher the fill rate, the higher the rate of increase in safety inventory. We also concluded that the fact that this is dependent on the level of uncertainty during lead-time (σL). Given a lot size of 500, and fill rates from 0.90 to 0.99 (in increments of 0.01) compare the safety inventory required for the following levels of uncertainty: σL=50, 150, and 250. Plots would be a nice way to graphically demonstrate, or you may submit a brief write-up explaining the correlation between the factors of fill rate and uncertainty on safety stock.

Reference no: EM1341302

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