Mechanical Engineering > Gate 2021 Set-1 > Mechanical
Robot Ltd. wishes to maintain enough safety stock during the lead time period between starting a new
production run and its completion such that the probability of satisfying the customer demand during
the lead time period is 95%. The lead time period is 5 days and daily customer demand can be assumed
to follow the Gaussian (normal) distribution with mean 50 units and a standard deviation of 10 units.
Using Ф-1(0.95) =1.64 , where Ф represents the cumulative distribution function of the standard normal
random variable, the amount of safety stock that must be maintained by Robot Ltd. to achieve this
demand fulfillment probability for the lead time period is units (round off to two decimal places).
Correct : 16.4
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