If the Standard Deviation of Demand Is Six Per Week

question 223

Multiple Choice

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock?

• A) 8 units
• B) 10 units
• C) 16 units
• D) 64 units
• E) Cannot be determined without lead time data.

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Definitions:

Demand

The desire and ability of consumers to purchase goods or services at given prices.

Supply

The total amount of a product or service that is available for purchase at any given price.

Dollar Appreciates

A situation where the value of the U.S. dollar increases compared to other currencies, affecting international trade and economic dynamics.

Interest Rates

The cost of borrowing money or the rate at which interest is paid by a borrower for the use of money.