A product has a standard deviation of demand of 15. The safety stock for a service level of 98%
Would be approximately:
A) 15
B) 26
C) 31
D) 8
E) 14.7

Question

Quizplus · Accepted Answer

The safety stock is calculated using the formula: Safety Stock = Z * Standard Deviation of Demand. For a 98% service level, the Z-score is approximately 2.05. Therefore, Safety Stock = 2.05 * 15 ≈ 30.75, which rounds to 31.

A Product Has a Standard Deviation of Demand of 15