solution

Which one of the following statements is accurate? Assume that the demand during lead time has a Normal distribution.

A) The level of safety stock maintained decreases when the desired cycle-service level increases.

B) The level of safety stock maintained decreases when the standard deviation of demand during lead time increases.

C) When no safety stock is maintained in a continuous review system, stockouts will occur during leadtime with 50% probability after a replenishment order is placed.

D) The level of safety stock maintained is greater when lead time is smaller.

A process for addressing insurance claims has 100,000 claims waiting at different stages in the process. If the average demand on the system is 1,000 claims per day, then the average time that a claim takes, based on applying Little’s law, is:

0.5 days

20 days

0.05 days

100 days

A business approach in which the marketing department is publicizing a company’s ability to provide a large variety of products very quickly while the supply chain department is primarily focusing on the lowest cost providers of materials has a high likelihood of success.

True

False

If two different production processes have the same flow rate, they will always have the same amount of work-in-process inventory.

True

False