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A company wants to determine its reorder point (R) .Demand is variable and they want to build a safety stock into R.The company wants to have a service probability coverage of 95 percent.If average daily demand is 8,lead time is 3 days and the standard deviation of usage during lead time is 2,which of the following is the desired value of R?
Lead Time
The amount of time it takes for an order to be fulfilled from the moment it is placed.
Setup Cost
The cost incurred to prepare equipment or processes for manufacturing or production.
Material Use Schedule
Material use schedule outlines the timing and quantity of materials to be used in a production process, ensuring efficient resource management and planning.
Safety Stock
Inventory a company holds beyond its expected demand to protect against stockouts due to unpredictable variations in supply and demand.
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