Increase or decrease the amount of safety stock

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Reference no: EM13962015

A house painting company uses, on average 70 cans of paint every week with a standard deviation of30 cans per week. Demand for cans of paint follows an approximately Normal distribution. Lead time for ordering more paint is consistently 1 week.

a. How much safety stock is required for a stock out risk of 1 percent?

b. What ROP will provide a risk of stock out of 1 percent during lead time?

c. Would a stock out risk of 5 percent increase or decrease the amount of safety stock? Support your answer.

Reference no: EM13962015

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