A Product's Usage Is Normally Distributed with a Weekly Average

question 6

Multiple Choice

A product's usage is normally distributed with a weekly average demand of 2,000 units and a weekly standard deviation of 125. The lead time for the product is 4 weeks. If the company would like to have a service level of 90% for this product then the reorder point is approximately

• A) 8,320 units.
• B) 9,218 units.
• C) 10,134 units.
• D) 11,244 units.

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Definitions:

Free Cash Flow

A measure that assesses a company’s ability to fund its capital expenditures and dividends from its net cash provided by operating activities.

Generated Enough Cash

Refers to a situation where a business's operations have produced sufficient cash flow to cover its expenses and investment activities.

Capital Expenditures

Capital utilized by a corporation to purchase, improve, and manage tangible assets including real estate, manufacturing facilities, or machinery.

Operating Activities

Refers to the primary day-to-day activities of a business that are involved in producing and selling its goods and/or services, which generate revenue.