Daily demand for a product is normally distributed with a mean of 150 units and a standard deviation of 15 units. The firm currently uses a reorder point system, and it seeks a 75% service level during the lead time of 6 days
a. What safety stock is appropriate for the firm?
b. What is the reorder point?
a. SS = 0.67 × 15 × = 24.6 units
b. ROP = 1506. + 24.6 = 924.6 units
Business
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