What amount of safety stock is necessary for the fastener

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Reference no: EM131028650

An automobile manufacturer orders a specific fastener from the same supplier every 4 weeks. Lead time is 1 week. The supply chain manager must determine how many fasteners to order. A check of stock reveals 10 boxes on hand, each containing 200 units. Daily usage of the fastener is approximately normal, with a mean of 125 units and a standard deviation of 50. The desired service level is 98%.

Questions:

A) What amount of safety stock is necessary for the fastener?

B) How many boxes (of 200 units each) should be ordered?

Reference no: EM131028650

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