Consider a Periodic Review Inventory System with a Lead Time

question 28

Multiple Choice

Consider a periodic review inventory system with a lead time of two weeks and a review period of seven weeks. If the standard deviation of weekly demand is 200 and the desired cycle-service level is 86%, what should the safety stock equal?

• A) 305
• B) 516
• C) 600
• D) 648
• E) 1944

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Definitions:

Costs of Delay

The negative consequences or losses associated with not resolving a problem or completing a task in a timely manner.

Distributive Bargaining Strategies

Negotiation techniques focused on dividing a fixed amount of resources, often resulting in a win-lose situation.

Resistance Point

The least favorable point at which one will accept a negotiated agreement.

Presumptive Method

A technique or approach that assumes certain outcomes or conditions as a basis for further discussion or analysis.