Answered: Service Level (%) Safety Factor 50 0.00…

Service Level (%) Safety Factor 50 0.00 75 0.67 80 0.84 85 1.04 90 1.28 94 1.56 95 1.65 96 1.75 97 1.88 98 2.05 99 2.33 99.86 3.00 99.99 4.00 FIGURE 11.5 Table of safety factors.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

If sigma is 130 units, and the demand during the lead time is 250 units, calculate the
safety stock and order point for:
a. A 50% service level.
b. An 85% service level.
Use the table in Figure 11.5 as help to calculate your answer.

Service Level (%)
Safety Factor
50
0.00
75
0.67
80
0.84
85
1.04
90
1.28
94
1.56
95
1.65
96
1.75
97
1.88
98
2.05
99
2.33
99.86
3.00
99.99
4.00
FIGURE 11.5 Table of safety factors.

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