If the stock level for a SKU is currently 30 days worth and management decides toincrease safety stock on the SKU from 14 days to 21 days, the resulting averagestock level will be approximately37 days23 days33.5 days51 days

Safety Stock is the amount of inventory held to protect against stockouts due to demand variability…

Answered: If the stock level for a SKU is…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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Suppose that the manager of a construction supply house determined from historical recordsthat demand for sand during lead time averages 50 tons. In addition, suppose the managerdetermined that demand during lead time could be described by a normal distribution thathas a mean of 50 tons and a standard deviation of 5 tons. Answer these questions, assumingthat the manager is willing to accept a stockout risk of no more than 3 percent:a. What value of z is appropriate?
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If the stock level for a SKU is currently 30 days worth and management decides to increase safety stock on the SKU from 14 days to 21 days, the resulting average stock level will be approximately 37 days 23 days 33.5 days 51 days