If the Standard Deviation of Lead Time Demand Is 10

question 33

Multiple Choice

If the standard deviation of lead time demand is 10 units,management has a preferred service level of 99.9% (z = 3) ,and holding costs are $0.75 per unit per month,the annual cost of holding safety stock for this product will approximate to

• A) $22.50.
• B) $270.00.
• C) $90.00.
• D) $89.91.

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Definitions:

Functions

The role or activity that something is expected to perform within a particular context.

Consequences

The results or outcomes of actions that may influence future events or behaviors.

Symbolic

Serving as a symbol or representing something beyond its literal sense.

Interexchange

The act or process of reciprocal trade or communication, sharing, or interchange between two or more parties.