Thomas Toys Ltd. uses a periodic review inventory management system. One important item for the company is building blocks, which sell, on average, four sets per day. However, the standard deviation of demand is one set per day. The company checks the status of inventory for building blocks every 16 days. When blocks are reordered from the supplier, it takes 20 days to be replenished. Thomas has just checked its inventory and found that it currently has 140 sets in stock. The company desires to maintain a 97.5 percent service level. Use Table 7-2.
a. How many sets of building blocks should Thomas Toys order? (Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to the nearest whole number.)
Order quantity for building blocks __________ sets
b. Do we re-order?
Yes
No