Managing Operations Across the Supply Chain 1st Edition by Morgan Swink,Steven Melnyk,Bixby Cooper, Janet Hartley

Exercise 5

Suppose you are a corporate buyer.One of your suppliers delivers a particular part in 12 days on average, with a standard deviation of 3.The daily usage averages 20 units per day with a standard deviation of 4.What is the standard deviation of demand during lead-time? If you use a continuous review policy, how much safety stock would you want on hand to ensure at least 90 percent availability of the part while waiting for replenishment?