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Assume that a manufacturing company works five days per week, a supplier for a part has...

Assume that a manufacturing company works five days per week, a supplier for a part has a lead-time of 3 days and the daily demand for the part is 120 items with standard deviation of 23.5 items. If the company wants to use a 97% service level (3% stock-out situation allowed), what would be the required safety stock and ROP

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Answer #1

Because only demand is variable(i.e has a standard deviation), formula R= dLT + Z0, VLT is appropriate ū = demand rate = 120

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