The daily demand of a product can be specified by a normal distribution. The average daily demand is 250 units with a standard deviation of 40 units. The order lead time for this product is also normally distributed with an average of 10 days and a standard deviation of 3 days. What is the safety stock and reorder point for a 95 percent service level?
Use the formula Safety Stock = Use the values for d=250, LT= 10, σd = 40 and σLT=3 as given in the problem; look up for 95 % from the normal table. It is given as 1.64 Can you help me solve the safety stock and reorder point?