Scenario 12.2 - Hamsterdam
Marlo Stanfield's operation also uses large quantities of prepaid cell phones,on average 1500 per week with a standard deviation of 145.The lead time for their own brand of prepaid cell phones is three weeks and they have a lot size of 350 phones.To ensure they never run out,they keep a safety stock of 500 phones with Proposition Joe.
-What is the standard deviation of demand during lead time?
A)251 phones
B)2187 phones
C)4500 phones
D)4751 phones

Question

Quizplus · Accepted Answer

To calculate the standard deviation of demand during lead time, we use the formula:
SDLT = SD x square root of lead time
Here, SD = 145 (given standard deviation of weekly demand)
Lead time = 3 weeks (given)
SDLT = 145 x square root of 3 = 251
Therefore, the standard deviation of demand during lead time is 251 phones.

As there is no question about making any specific decision or choice, there are no answer choices required for this part of the scenario.