What safety stock and reorder point are necessary


Question: Suppose that Poolco, after some investigation, finds that in the future, the company's average demand per day is going to be normally distributed with a mean of 3.5 and a standard deviation of 2 (i.e. the demand is not at a fixed rate). What safety stock and reorder point are necessary to obtain a 90% service level? Assume the lead time to be 10 days as before.

 

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