Scenario 9.8 a Company Operating Under a Continuous Review System Has an Has

question 6

Multiple Choice

Scenario 9.8
A company operating under a continuous review system has an average demand of 50 units per week for the item it produces. The standard deviation in weekly demand is 20 units. The lead-time for the item is six weeks, and it costs the company $30 to process each order. The holding cost for each unit is $10 per year. The company operates 52 weeks per year.
-Use the information in Scenario 9.8. What is the desired safety stock level if the company has a policy of maintaining a 90% cycle-service level?

• A) less than or equal to 50 units
• B) greater than 50 but less than or equal to 100 units
• C) greater than 100 but less than or equal to 150 units
• D) greater than 150 units

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Definitions:

External Validity

The capacity for the conclusions of a study to be relevant in other circumstances and among different groups of people.

Stereotypical Assumption

A generalized and oversimplified belief about a particular group or type of individuals.

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A cleaning agent, specifically designed for washing clothes, that helps remove dirt and stains.

External Validity

The degree to which the results of a study can be generalized to other situations, populations, or time periods.