Question

The lead time for an inventory item is 3 weeks and weekly dmand average 8000 units with SD of 1500 units for an item we deisire a 78% servcie level. what are our average requirements during lead time?

Answer 1

24,000 units

Step-by-step explanation:

Demand per period, = 8,000 units

Lead time, LT (in periods) = 3 weeks

Average demand during lead time = Lead Time * Demand per period

Average demand during lead time = 8,000 units * 3 weeks

Average demand during lead time = 24,000 units

Thus, our average requirements during the lead time of 3 weeks is 24,000 units