How many units of safety stock should be held

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Reference no: EM13962027

Consider a periodic review system, where orders are placed every 12 days. The firm strives to provide a 97.5% cycle service level. Demand averages 300 units per day, and the standard deviation of demand per day is 64 units. Lead time is 18 days.

a) How many units of safety stock should be held?

b) What should be the target inventory level (order-up-to level) be?

Reference no: EM13962027

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