A Store Has Annual Average Daily Demand Rate of 16

question 10

Multiple Choice

A store has annual average daily demand rate of 16 units with a standard deviation of 2 units,and the time between orders is 90 days and the lead time for it to receive an order from its supplier is 20 days,if the supplier visits the store and there are 6 units of inventory in stock,the store's order size for a 95% service level is approximately

• A)3,268.6 units
• B)1,488.6 units
• C)1,788.6 units
• D)2,346.6 units

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Definitions:

Required Condition

A prerequisite or necessary condition that must be met for a certain procedure, test, or action to be appropriate or valid.

Sample Variance

A measure of the dispersion of a sample dataset from its mean, calculated as the sum of squared deviations from the sample mean divided by the number of observations minus one.

Population Variance

A statistical measure of the distribution of values in a population, indicating how much individuals within the population differ from the population mean.

Upper Limit

The maximum value in a set or the highest value that a variable can take.