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Answer: 1,425.2 units
Explanation:
Recorder point :
Lead time = 4 weeks
Expected demand during this time is
= No. of weeks × Weekly demand
= 4 × 273
= 1,092 units
Standard Deviation = 95 units
Standard Deviation for the 4 week period is:
= 170 units
At the 95% probability level, the z-score is 1.96 (From the Z- table)
Safety Stock = Z-value × Standard Deviation for the 4 week
= 1.96 × 170 units
= 333.2 units
Recorder point = Safety stock + expected demand during the time period so,
= 333.2 units + 1,092 units
= 1,425.2 units