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:

Component Proposition

A specific statement or claim that forms part of a larger argument or theory, contributing to its overall conclusion.

Compound Sentence

A compound sentence is a sentence that combines two or more independent clauses, typically connected by a conjunction, punctuation, or both.

Compound Sentences

Sentences formed by connecting two independent clauses with a coordinating conjunction or a semicolon.

Connective

A logical operator that connects two propositions in a compound sentence, such as and, or, not, if...then.