Question

XYZ company uses "Continuous Review System (Q, ROP)" for an item. Lead-time is currently one week. The average demand during the week is 100 units with a standard deviation of 20 units. If the supplier increases lead-time to 4 weeks, what will be the standard deviation of lead-time demand?

a.40 80
b.17.89
c.44.72
d.120

Answer 1

The demand value of time lead is

a) 40

Explanation:

X Y Z company Uses "Continuous Review System for an item

Currently demand = 100 units

standard deviation = 20 units

lead time increase = 4 weeks

Apply Z statistic we get the value of standard deviation.