Question

Q-mart wants to know what safety stock should be maintained for its jumbo flyer if j. flyer's daily demand is normally distributed with a mean of 5 and a standard deviation of 3, its lead time is 4 days and its service level is 95%? (choose the closest value)

Answer 1

The answer is 10. (Multiply your maximum daily usage by your maximum lead time in days. Multiply your average daily usage by your average lead time in days. Calculate the difference between the two to determine your Safety Stock). 5x4=20 2x4 = 8 20-8=12 x .95 = 11.4 closest value is 10.