Q-Mart wants to know what safety stock should be maintained forits Jumbo Flyer if J. Flyer’s daily demand is normally distributedwith a mean of 5 and a standard deviation of 3, its lead time is 4days and its service level is 95%? (choose the closest value)
1051520
Expert Answer
Answer:
Given Data,
For the Service level 95%, Z Value = 1.64
Standard Deviation = 3
Lead time = 4 Days
Daily average Demand = 5
Formula for Calculating safety stock is = Z score X StandardDeviation X Square root of Lead Time
So, Safety stock = 1.64 X 3 X Square root of 4 = 9.84 =10
So, Correct Answer
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