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Answer on Other Management Question for abdul

Question #70998

(ii) After analyzing the cost of various options for obtaining bolts, the company recognizes that ,Although the lead time is 3 days, the demand during lead time often varies. The company has kept very careful records and has determined that lead time is normally distributed with a standard deviation of 1.2 unit.
a) What Z value would be appropriate for a 95% service level?

b) What safety stock should the company maintain if it wants a 95% service level?

c) What is the adjusted ROP for the bolts?

Expert's answer
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