Explain what amount of safety stock is appropriate, Operation Management

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Given this information:

Lead-time demand = 630 pounds

Standard deviation of lead time demand = 40 pounds (Assume normality.)

Acceptable stockout risk during lead time = 4 percent

a. What amount of safety stock is appropriate?

b. When should this item be reordered?

c. What risk of stockout would result from a decision not to have any safety stock?


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