A shoe company is considering a change in its current inventory system. The information regarding the shoes is as follows:
Average demand = 200 pairs/week
Lead time = 3 weeks
Order cost = $65 per order
Unit cost = $20
Carrying charge rate = .20
Desired service level = 95 percent
Standard deviation of weekly demand = 50
Number of weeks per year = 52
Q: What should be the reorder point to have a 95 percent service level?