How much safety stock should be kept


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Q: MassPC Inc. Produces PC Pal model. It takes 1 week to produce a batch. Factory orders are normally distributed with average 400 units per week, and standard deviation of forecast errors is estimated at 125 units. If MassPC wants to provide service level of 80%, how much safety stock should be kept? What is the reorder point? What if the service level is 90%, 95%, or 99%?

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