11. Expected demand during lead time = 300 units, standard deviation of demand during
lead time = 30 units. Assuming that demand during lead time is normally distributed, determine
each of the following;
a) The ROP that will provide a risk of stockout of 1 percent during lead time. (369.9)
b) The safety stock needed to attain a 1 percent risk of stockout during lead time. (69.9)
c) Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk?
Explain and provide example step by step
Expert Answer
Risk of 1 percent stock out is equal to in-stock
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