The annual demand for a product is 15,600 units. The weekly demand is 300 units with a standard deviation of 90 units. The cost to place an order is $31.20, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.10 per unit. Find the reorder point necessary to provide a 98% service probability.
Suppose the production manager is asked to reduce the safety stock of this item by 50%. If she does so, what will the new service probability be?