question archive Lead time is exactly 20 days long

Lead time is exactly 20 days long

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Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time?

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Answer:

Lead time (L) = 20 days

Standard deviation of daily demand demand (\sigmad) = 2 gallons

Standard deviation of demand during lead time=\sigmad x sqrt of L

= 2 x sqrt of 20

= 2 x 4.47

= 8.94

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