Consider a work center with a demand rate of 50 parts per hour and using a container that can hold 12 parts. It is estimated that the container takes 1 hour to cycle through the work cell. Assume a safety stock level of 10 percent. What is the value of S for this system?
A) 50
B) 12
C) 1
D) 0.1

Question

Quizplus · Accepted Answer

The safety stock level is 10 percent of the demand rate, which is 50 parts per hour. Therefore, the safety stock level is 5 parts. The value of S is the sum of the demand rate and the safety stock level, which is 50 + 5 = 55 parts.

Consider a Work Center with a Demand Rate of 50