The amount of denim used daily by the Southwest Apparel Company in its manufacturing process to make jeans is normally distributed with an average of 4000 yards of denim and a standard deviation of 600 yards. The lead time required to receive an order of denim from the textile mill is a constant 7 days.
1. Determine the safety stock and reorder point if the company wants to limit the probability of a stockout and work stoppage to 5%.
2. What level of service would a safety stock of 2000 yards provide?