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oee [108]
3 years ago
13

For a continuous review​ policy, 74% cycle service​ level, lead time equals 1.5​ weeks, and standard deviation of weekly demand​

= 200, how many units of safety stock should be​ held? A. 192 B. 189 C. 157 D. 231 E. 181 F. 222
Business
1 answer:
svet-max [94.6K]3 years ago
6 0

Answer:

C. 157

Explanation:

Safety stock = Z-score *  Standard deviation of average demand * √lead time

Z-score for 74 % service level is 0.643

Standard Deviation of demand is 200

Lead Time = 1.5 weeks

Safety stock = 0.643 * 200 * √1.5

Safety stock = 0.643 * 200 * 1.224745

Safety stock = 157.502

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