You would like to use the fixedtime period inventory model t

You would like to use the fixed-time period inventory model to compute the desired order quantity for a company. You know that vendor lead time is 10 days and the number of days between reviews is 15. Which of the following is the standard deviation of demand over the review and lead time period if the standard deviation of daily demand is 10?

-25

-40

-50

-73

-100

Solution

Correct answer is = 50 The demand over 25 days (15 +10 = 25 days) of time between the review and lead time is the square root of (25 X 10 X 10) square root of (25 X 10 X 10) = square root of (2500) 50