A pharmacy dispenses a generic drug at an average rate of 80 milligrams per day. An examination of pharmacy records suggests that daily demand is approximately normal and has a standard deviation of 10 milligrams per day, Lead time is four days and the pharmacist wants out a stock out risk that does not exceed 1 percent.
a. Determine the reorder point (ROP)
b. How much safety stock must be carried?
c. What service level would a reorder point of 310 mg prowide?