Question

To take into consideration demand uncertainty in reorder point (R) calculations, what do we add to the product of the average daily demand and lead time in days when calculating the value of R

Answer 1

Answer:

The answer is "The result of the standard deviation of request and a 'z' rating over a certain possibility of operation".

Explanation:

When we have determined 10 units per day for standard deviation with supply, while the period to ordering in 5 days. Its standard 5-day duration is or the equation 17.8, which is multiplied by the z-score, which is the equation 17.9 has as long as per day is selected based, that's why the result of normal volatility of request as well as a 'z' score over a certain possibility of service is correct.