Table $5.10$ A Firm Using the Periodic Review System (P System) Reviews

question 163

Multiple Choice

Table $5.10$
A firm using the periodic review system (P system) reviews the status of an item every 4 weeks. The standard deviation in weekly demand is 60 units. The lead time for the item is 3 weeks, whereas demand averages 200 units per week. You will need to refer to a normal table to answer the question(s) .
-Use the information in Table 5.10. How much safety stock should be held to achieve a 95 percent cycle service level?

• A) less than or equal to 270 units
• B) greater than 270 but less than or equal to 285 units
• C) greater than 285 but less than or equal to 300 units
• D) greater than 300 units

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Definitions:

Hidden Costs

Expenses that are not obvious at the initial stage but emerge during the process or lifecycle of a project, product, or service.

Cash Flow

The total amount of money being transferred into and out of a business, affecting its liquidity, operations, and financial health.

Product Flow

The movement of goods from the place of production to the point of sale and finally to the end-consumer, encompassing the entire supply chain process.

Information Flow

Information flow refers to the way information moves through an organization or system, facilitating decision-making and coordination.