Assuming that demand for walnut fudge ice cream at the Sweet Cream Dairy can again be approximated by a Normal distribution with a mean of 7 gallons per day and a standard deviation of 0.7 gallons per day, answer the following questions assuming the dairy is operated using a periodic review policy. Assume that the new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week.
(a) Under a periodic review policy if inventory is reviewed every 3 days, what is the base stock level?
(b) What is the order size that would be needed under the periodic system if the store currently holds 15 gallons in inventory?
(c) What is the order size that would be needed under the periodic system if the store currently holds 25 gallons in inventory and the previous order was for 15 gallons?