Question

a specific product has expected demand during lead time of 100 units, with a standard deviation during lead time of 25 units. what safety stock (approximately) provides a 95% service level?

Answer 1

EOQ = SQRT (2 × Annual Demand × Ordering Cost Per Unit / Carrying Cost Per Unit)

SAFETY STOCK= Lead time factor * Service factor * Standard Deviation

SAFETY STOCK= Lead time factor *1.645 *25

**Assuming a ONE-month lead-time, and as such Lead time factor =1

the safety stock of 41 units should provide a 95% service level.

What is safety stock?

A safety stock is a surplus of a product that is kept in the warehouse to avoid running out of stock. It acts as protection against shifts in demand. For instance, you should have five days' worth of safety stock if you sell 100 items per day. 100 goods multiplied by 5 days' worth of inventory gives you a safety stock of 500 units.

To learn more about safety stock click on the given link:

https://brainly.com/question/2930569

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