Daily Demand for a Product Is Normally Distributed with a Mean

question 60

Essay

Daily demand for a product is normally distributed with a mean of 160 units and a standard deviation of 12 units. The firm currently uses a reorder point system, and seeks a 75% service level during the lead time of 9 days.
a. What safety stock is appropriate for the firm?
b. What is the reorder point?

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.