The Zork Company carries an inventory item that has a normally distributed demand during the reorder period. The mean demand is 350 units and the standard deviation is 10. Marketing determines that a policy resulting in stockouts occurring only 5% of the time is acceptable.
(a) Marketing probably knows the stockout costs (T/F)
(b) Determine the safety stock level for production planning
(c) With the given service level, at what demand will a stockout occur?