1. The daily demand for 52" plasma TV's at Sarah's Discount Store is normally distributed, with an average of 5 and a standard deviation of 2 units. The lead time for a shipment of TV's is 10 days and is fairly constant. Determine the reorder point (ROP) and safety stock (SS) for a 95% service level.
2. A hospital orders rolls of gauze bandages using a fixed interval system. The bandages have a mean usage of 9 rolls and a standard deviation of 4 rolls. The lead time is 2 days and the desired risk of stockout is 1%. Assume a 12 review period. Determine the target inventory level (TIL) and safety stock (SS).
3. Oxygen is delivered to General Hospital every Thursday. The quantity delivered is based on an order called in by the hospital on Monday, 3 days before. The average daily usage of oxygen is 6 tanks with a standard deviation of 1.2 tanks. Determine the target inventory level (TIL) if the hospital wishes to take no more than a 2% chance of running out of oxygen between orders.