Using the Probability Approach to Determine an Inventory Safety Stock

question 5

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?

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

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Definitions:

Customers

Individuals or businesses that purchase goods or services from another entity, providing the revenue stream for the business.

Prejudicial Hiring Practices

Employment practices that unfairly discriminate against candidates based on non-job-related characteristics.

Census

An official count or survey of a population, typically recording various details of individuals, such as age, sex, occupation, and nationality.

Sample Employees

A group of employees selected from a larger population for the purpose of conducting a study or statistical analysis.