Question

Two products are considered for evaluation, the data of which is as given per week.

Historical Data for Product A

Week	1	2	3	4	5	6	7	8
Massachusetts	33	45	37	38	55	30	18	58
New Jersey	46	35	41	40	26	48	18	55
Total	79	80	78	78	81	78	36	113

Historical Data for Product B

Week	1	2	3	4	5	6	7	8
Massachusetts	0	3	3	0	0	1	3	0
New Jersey	2	4	0	0	3	1	0	0
Total	2	7	3	0	3	2	3	0

The lead time is 1.5 weeks and the standard deviation of lead time is 1.25 weeks. Refer the attached King Safety Stock analysis for conceptual clarity and answer the following questions,

i) If the lead time is considered to be constant, what would be the safety stock for product A & B?

ii) If the lead time is not constant and is as given in the data above but independent of the demand, what would be the safety stock for product A & B?

iii) If the lead time is not constant and is as given in the data above but dependent on the demand fluctuations, what would be the safety stock for Product A & B?

Answer 1