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

question 74

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 product's lead time is 4 weeks.Currently,the reorder point for this product is 8,200.If the company would like to have a service level of 95% for this product then

• A)it must decrease its safety stock by approximately 412 units.
• B)it must decrease its safety stock by approximately 212 units.
• C)it must increase its safety stock by approximately 412 units.
• D)it must increase its safety stock by approximately 212 units.

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Definitions:

Planned Method

A systematic, pre-determined approach or strategy designed to achieve specific goals or outcomes.

Companywide

Pertains to policies, practices, or actions affecting an entire organization.

Systematic Method

An organized, structured, and logical approach to problem-solving or investigation, following a specific sequence of steps.

Personal Changes

Adjustments or transformations in one's life or circumstances that affect the individual personally.