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Suppose that you are a procurement specialist at XYZ corporation. One of your responsibilities is to make sure that you have enough parts on hand for your manufacturing department to process.
Your manager has indicated that "we should be 95% confident that we will have enough inventory for the manufacturing department." Also, you know from experience that once you place an order on the supplier, the "lead time" takes 10 weeks for the order to arrive.
Using the daily demand data below (and assuming calendar days where 1 week = 7 days), determine how many extra units of the part you should carry (i.e., safety stock).
Round to the nearest whole number (e.g., enter 54.5 as 55).
Day
Demand
1
92
2
89
3
126
4
188
5
149
6
132
7
160
8
90
9
146
10
11
201
12
105
13
104
14
85
15
154
16
17
190
18
86
19
136
20
145
21
121
22
23
163
24
116
25
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