Demand = 100,000 units/year
Number of days per year = 250
Standard deviation of daily demand = 50 units
Average lead time = 5 days
Standard deviation of lead time: 2 days
Cycle-service level = 95%
A continuous review system is used to control inventory. You can either use normal distribution table from the textbook ( i.e., pg 599) or excel function to figure out z value.
What is the safety stock level for the above problem?
a. less than or equal to 1000 units
b. equal to 1000 units
c. greater than 2,500 units but less than or equal to 3,500 units
d. greater than 1,500 units but less than or equal to 2,500 units
e. greater than 0 but less than or equal to 1,500 units