Question

If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is 10, which of the following is the standard deviation of usage during lead time?A) 10 B) 20 C) 40 D) 100 E) 400

Answer 1

Answer:

B

Explanation:

Given Time (T) = 4

Standard deviation of daily demands (STDdaily) = 10

Standard deviation of usage = STDdaily × sqrt T

= 10 × 2

=20

Answer 2

Based on the information given  the standard deviation of usage during lead time is B) 20.

Using this formula

Standard deviation=√Variances of lead time number of days of lead time

Let plug in the formula

Standard deviation=√4 days(10x10)

Standard deviation=√4 days(20)

Standard deviation= √400

Standard deviation=20

Inconclusion  the standard deviation of usage during lead time is B) 20.

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