Lead time demand is distributed normally

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Reference no: EM132244072

A Given this information:

i. Expected demand during lead time = 600 units.

ii. Standard deviation of lead time demand = 60 units.

Determine each of the following, assuming that lead time demand is distributed normally:

a. The safety stock needed to attain a 1 percent risk of stockout during lead time.

b. The reorder point (ROP) that will provide a risk of stockout of 1 percent during lead time.

c. Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk?

d. Would the ROP be larger, smaller, or unaffected if the acceptable risk was 2 percent instead of 1%? Explain.

Reference no: EM132244072

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