A Company Wants to Determine Its Reorder Point (R)

question 28

Multiple Choice

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?

• A)About 17.9
• B)About 19.7
• C)About 24.0
• D)About 27.3
• E)About 31.2

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