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GG finds that the demand is really uncertain. The typical leadtime for supply is 9 weeks....

GG finds that the demand is really uncertain. The typical leadtime for supply is 9 weeks. The standard deviation of demand during the leadtime is 120. If GG wants to provide 95% cycle service level, what should be the safety stock and reorder level? Show calculations to get credit.

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Answer #1

For 95% service level, z=1.645

LT=9

=120

safety stock = (z**LT)0.5

safety stock = (1.645*120*9)0.5

Safety Stock =42.15

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