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Stochastic Inventory Model

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Jan 15, 2022
37:32

Mind it, while calculating the formula for safety stock, √L must be multiplied with σ, because the mean is not just d, it is d*L, i.e. average demand during lead time, not average daily demand. So, you need to find out the SD for the entire duration of the lead time, not just SD of daily demand.

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Stochastic Inventory Model | NatokHD