Q-Mart wants to know what safety stock should be maintained for its Jumbo Flyer if J....

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Q-Mart wants to know what safety stock should be maintained for its Jumbo Flyer if J....

Q-Mart wants to know what safety stock should be maintained for its Jumbo Flyer if J. Flyer's daily demand is normally distributed with a mean of 5 and a standard deviation of 3, its lead time is 4 days and its service level is 95%? (choose the closest value)

10

5

15

20

business Operations-Management

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Answer 1

Answer #1

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 Standard Deviation X Square root of Lead Time

So, Safety stock = 1.64 X 3 X Square root of 4 = 9.84 =10

So, Correct Answer is A. 10

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Answer 2

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