A business will always avoid stock outs to happen, as it will create a poor customer experience and potentially pushing customers to competitors. You have an online business selling children clothes. Your bestselling item is the “among usâ€ T-shirts. You sell an average of 25 items per day. Your best day is 35 unit sold. From the time you order the shirt from your suppler it takes 15 days to arrive on average. There are times when it arrives as quickly as 5 days and as long as 30 days.
i. Illustrate with a diagram to explain the importance of having safety stock. ii Calculate the safety stock for given problem Assume that the demand and lead time are both constant, calculate the Reorder Point (ROP) Give FOUR (4) reasons stockout still happens