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Posted by on Thursday, July 29, 2010 at 10:30pm.

Safety stock is used in the situation where neither daily demand nor lead-time is stochastic.
True or False

  • production and operations management - , Thursday, July 29, 2010 at 10:33pm

    http://dictionary.reference.com/browse/stochastic

    What do you think?

  • production and operations management - , Thursday, July 29, 2010 at 11:27pm

    I think false because safety stock is kept for cases when forecast errors occur (due to changes in daily demand or lead time), which would make daily demand and lead-time stochastic. Is this a logical interpretation?

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