Would the ROP be larger-smaller or unaffected

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Reference no: EM131876058

Question: Given this information:

Expected demand during lead time = 300 units

Standard deviation of lead time demand = 30 units

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

a. The ROP that will provide a risk of stock out of 1 percent during lead time.

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

c. Would a stock out risk of 2 percent require more or less safety stock than a 1 percent risk? Explain. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percent instead of 1 percent? Explain.

Reference no: EM131876058

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