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    order point, safety stock

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    1.For the following scenario, find the order point (R) needed to provide 95% service level:

    Average daily demand = 29 units. Standard deviation of daily demand = 5.7 units. Lead time = 3 days (constant).

    Be sure to display any important intermediate calculations necessary to find your answer.

    2.How much safety stock is being carried in the policy you found above?

    Suppose instead we decide to carry 20 units of safety stock. What order point (R) will be required? What is the predicted service level under this policy? SHOW YOUR WORK AND ANY IMPORTANT INTERMEDIATE VALUES.

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    Solution Summary

    The expert examines order point and safety stocks.