Author Question: The fixed-period inventory model requires more safety stock than the fixed-quantity models because (Read 105 times)

lidoalex · **on:** Dec 3, 2019

Question 1

In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. The standard deviation of demand during lead time is approximately
◦ 15 units.
◦ 154 units.
◦ 13,125 units.
◦ 100 units.
◦ 500 units.

Question 2

The fixed-period inventory model requires more safety stock than the fixed-quantity models because
◦ a stockout can occur during the review period as well as during the lead time.
◦ replenishment is not instantaneous.
◦ this model is used for products that have large standard deviations of demand.
◦ this model is used for products that require very high service levels.
◦ setup costs and holding costs are large.

frogdreck123456 · **Reply #1 on:** Dec 3, 2019

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