Using the Probability Approach to Determine an Inventory Safety Stock

question 18

Multiple Choice

Using the probability approach to determine an inventory safety stock and wanting to be 95 percent sure of covering inventory demand,which of the following is the number of standard deviations necessary to have the 95 percent service probability assured?
79)

• A)1.28
• B)1.64
• C)1.96
• D)2.00
• E)2.18

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Definitions:

Theory

A set of principles on which the practice of an activity is based or an explanation of the principles of phenomena.

Confirmation Bias

A cognitive bias that involves favoring information that confirms previously existing beliefs or biases.

Principle Of Falsifiability

The criterion for demarcating scientific from non-scientific statements; a theory must be testable and potentially able to be proven false.

Denialism

The choice to reject information or evidence that conflicts with an individual's beliefs, often seen in contexts such as climate change denial.