DETERMINATION OF REORDER POINT - I
| Reorder point |
= Max. reasonable demand
during lead time
= expected demand during lead time + safety stock (usually
pre specified by management) |
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K= 0; risk
of shortage = 50% service level = 50%
K= 0; risk of shortage = 15.87% service level =
84.13%
K= 0; risk of shortage = 2.28% service level = 97.72%
K= 0; risk of shortage = 0.13% service level = 99.87%
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