Demand for a product is relatively constant at five units


Demand for a product is relatively constant at five units per day. Lead time for this product is normally distributed with a mean of ten days and a standard deviation of three days. (a) What reorder point provides a 50 percent service level? (b) What reorder point provides a 90 percent service level? (c) If the lead time standard deviation can be reduced from 3 days to 1, what reorder point now provides 90 percent service? How much is safety stock reduced by this change?

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Operation Management: Demand for a product is relatively constant at five units
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