Assume that demand is normally distributed. with parameters mean and standard deviation. The safety stock depends upon the service level desired by the organization.
Here 90% service implies that changes of demand during lead time exceeding the re-order point quantity will be 10% only. From normal curve cumulative area table, Z value corresponding to the accept area 0.9 is 1.29. Thus safety stock to pritect 90% deviation will be 1.29 times standard deviation. Hence safety stock is:
Safety stock = 1.29 * 10 = 12.9
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