If demand during lead time is normally distributed,and if the standard deviation of demand during the lead time is 50 units,then to provide an additional 34% service level,the number of additional units that should be held in inventory is ______.
A)50 (= 50 times 1 standard deviation)
B)17 (= 50 * 34%)
C)1,700 (= 50 * 34)
D)150 (= 50 times 3 standard deviations)

Question

Quizplus · Accepted Answer

To provide an additional 34% service level, you would aim for a service level of approximately 84% (50% + 34%), which corresponds to about 1 standard deviation above the mean in a normal distribution. Therefore, holding an additional 50 units (1 standard deviation) in inventory is correct.

If Demand During Lead Time Is Normally Distributed,and If the Standard