Multiple Choice
Scenario 9.5
Cranium,Inc. ,purchases term papers from an overseas supplier under a continuous review system.The average demand for a popular mode is 300 units a day with a standard deviation of 30 units a day.It costs $60 to process each order and there is a five-day lead-time.The holding cost for a paper is $0.25 per year and the company policy is to maintain a 98% service level.Cranium operates 200 days per year.A normal distribution table is appended to this exam.
-Use the information in Scenario 9.5.What is the standard deviation of demand throughout the five-day lead-time period?
A) about 45 units
B) about 67 units
C) about 103 units
D) about 200 units
Correct Answer:
Verified
Correct Answer:
Verified
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