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

Question

Quizplus · Accepted Answer

To achieve approximately a 95% service level, a safety stock equivalent to 1.65 times the standard deviation of demand during lead time is typically used. Thus, safety stock = 1.65 * 25 = 41.25, which rounds to 41.

A Product Has Demand During Lead Time of 100 Units