A specific product has demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level?
A) 41
B) 55
C) 133
D) 140
E) 165

Question

Quizplus · Accepted Answer

For a 95% service level, the Z-score is approximately 1.65. Safety stock is calculated as Z-score * standard deviation of demand during lead time. Therefore, safety stock = 1.65 * 25 = 41.25, which is approximately 41.

A Specific Product Has Demand During Lead Time of 100