Discussion:
Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 7. Ms. Flynn would like to maintain a 90% service level.
Q1. What safety stock level do you recommend for BX-5?
Q2. What is the appropriate reorder point?