I am wondering when to round up or down for the optimal quantity (final answer), or just always round up, or according to the critical ratio? Especially in discrete demand type of question, the one with specific probability. (Inventory Management)
Expert Answer
When nothing specific is mentioned, one can round up to nearest whole number.
However, judgment must be made when it comes to Calculation of safety stock which is required for Reorder point calculation or calculation of optimum order quantity when it comes to newsvendor problem
Safety stock in reorder point calculation
= Z value of service level x Standard deviation
OR
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