In Order to Determine the Standard Deviation of Usage During

question 3

Multiple Choice

In order to determine the standard deviation of usage during lead time in the reorder point formula for a fixed-order-quantity inventory model, which of the following must be computed first?

• A) Standard deviation of daily demand
• B) Number of standard deviations for a specific service probability
• C) Stock-out cost
• D) Economic order quantity
• E) Safety stock level

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Definitions:

Bailee

A person or entity to whom goods are entrusted for a specific purpose by the bailor, who owns the goods.

Private Property

An ownership model where the possession of land, resources, or items is vested in individuals or organizations, distinct from public or state ownership.

Will

A document executed with specific legal formalities that contains a person’s instructions about the disposition of his property at his death.

Transferred

In the context of property or legal rights, refers to the act of moving ownership, authority, or responsibility from one party to another.