Safety stock-reorder point

Reference no: EM1393180

Lead-time demand is 600 pounds. The standard deviation of lead time demand is 52 pounds. Supposing the lead time demand is normally distributed and that an acceptable risk of stocking out is 4%:

a. What is the appropriate amount of safety stock?

b. What reorder point will ensure you can provide a 96% service level?

c. Would the company have to require more or less safety stock if it desires only 2% risk of stock out?

d. What is the effect on your reorder point?

Reference no: EM1393180

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