NetonBe makes sweaters, which involves the following steps: dyeing (i.e., into s

Question

NetonBe makes sweaters, which involves the following steps: dyeing (i.e., into six different colors), knitting of the dyed fabric into three sizes each (small, medium, and large) and then distributing to the stores. As such, there are 18 different sweater color & size combinations in the end, each with a demand that is normally distributed with a mean of 1,000 and a standard deviation of 100. If NetonBe wants a 95% service level, then how much safety inventory should they have in total? Approximately 1,650 Approximately 2,950 Approximately 1,800 Approximately 165

Explanation / Answer

At 95% service level, Z = 1.65 (from z score table).

safety stock = z*standard deviation*lead time (if any). z = 1.65 for a 95% service level. standard deviation = 100 (as given in the question). We will ignore the lead time as it is not given in the question.

Thus safety stock will be = z*standard deviation

= 1.65*100 = 165.

So, the answer is 165.

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---