Daily demand for Microwaves at a MegaMart store is normally distributed with a mean of 14 units and a standard deviation of 4. The supplier, Bed Bath & Microwaves, takes on average about 9 days to supply a MegaMart order. The standard deviation of lead time is 3 days. MegaMart is targeting a customer service level of 95 percent (z = 1.65) and monitors its inventory continuously. How much safety inventory of Microwaves should MegaMart carry? What should their reorder point (ROP) be?
Megamart should carry 59 units of safety stock and should order their optimal quantity at 284 units
Megamart should carry 56 units of safety stock and should order their optimal quantity at 305 units
Megamart should carry 68 units of safety stock and should order their optimal quantity at 272 units
Megamart should carry 72 units of safety stock and should order their optimal quantity at 198 units