Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time?
A)20 times 2
B)20 times 10
C)2 times the square root of 20
D)2 times the square root of 10
E)400 times the square root of 10

Question

Quizplus · Accepted Answer

The standard deviation of demand during lead time is calculated by multiplying the daily standard deviation by the square root of the lead time. Therefore, it is 2 times the square root of 20.

Lead Time Is Exactly 20 Days Long