Normal Distribution

Enter a mean, a standard deviation and an X value. The curve redraws and the red line marks X.

The Normal Distribution, also known as the Gaussian distribution, is a statistical probability distribution that is commonly used in supply chain management to model random variables such as demand and lead time. The Normal Distribution is characterized by its bell-shaped curve and is defined by two parameters: the mean and the standard deviation. In supply chain management, the Normal Distribution is often used to model demand and lead time variability, which can be used to calculate safety stock levels and service levels. For example, if demand for a product follows a Normal Distribution with a mean of 100 units per week and a standard deviation of 20 units per week, then a company might choose to maintain a safety stock level of 2 standard deviations, or 40 units, to ensure a high service level. Similarly, if lead time for a product follows a Normal Distribution with a mean of 5 days and a standard deviation of 1 day, then a company might choose to build in a buffer of safety lead time to ensure that orders are received in time to meet customer demand. The Normal Distribution is an important tool in supply chain management for modeling uncertainty and managing risk, and can be used to make informed decisions about inventory levels, lead times, and service levels.