Problem: A depanneur stocks supplies of mineral water. Demand during lead time for cases of mineral water follows a normal distribution with a mean of 23 cases. Lead time is known to be 5 days. The standard deviation of daily demand is 2 cases. If the store manager has a policy of keeping a safety stock of 5 cases.
Q1. What is the service level for the current situation?
Q2. What is the reorder point that corresponds to 80% service level?