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Introduction to Materials Management 8th Edition by Steve Chapman ,Tony Arnold ,Ann Gatewood ,Lloyd Clive
Edition 8ISBN: 978-0134156323Introduction to Materials Management 8th Edition by Steve Chapman ,Tony Arnold ,Ann Gatewood ,Lloyd Clive
Edition 8ISBN: 978-0134156323 Exercise 7
For an SKU, the standard deviation of demand during the lead time is 150 units, the annual demand is 10,000 units, and the order quantity is 750 units. Management says it will tolerate only one stockout per year. What safety stock should be carried? What is the average inventory? If the lead time is 2 weeks, what is the order point?
Explanation
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Safety stock:
Safety stock helps in con...
Introduction to Materials Management 8th Edition by Steve Chapman ,Tony Arnold ,Ann Gatewood ,Lloyd Clive
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