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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?
A bottling plant fills 2,400 bottles every two hours. The lead time is 40 minutes and a container accommodates 120 bottles. The safety stock is 10 percent of expected demand. How m
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