Article Index


 Solution to point a)

Present Case

Let us consider the Present Case. CSL=95% means that for each component the safety stocks factor k=1.6411.

Standard Deviation  demand during LT for each component is σ=3000 units/month.

This means that for each component the Safety Stocks are= 4923.49 units

Future Case

The difference with the Present Case is that in this case the number of models where each component is used is 9 and not 1.

Consequently the demand for each component is D9models= D X 9 = 45000 units /month with standard deviation σ9models=σ X 90.5= σ X 3 = 9000 units/month.

For each component then Safety Stocks are = k X σ9models =14770.46 units/month.