Problem
Ottawa's Fairmont hotel distributes, on average, 650 bath towels per day to their guests at the pool and within their hotel rooms. This demand is normally distributed with a standard deviation of 54 towels per day, depending on occupancy. The laundry service firm (3rd party contract), promises a 2 day lead time to wash and return/restock the towels when needed. The hotel aims for a 98% service level to its customers to ensure satisfied customers.
Using our QUAL8310 eText, visit Chapter 12, and navigate to the sub-chapter topic called "Other Probabilisitc Models". Read through this very brief topic and apply the equation from 12-15 that is applicable to this Question's scenario involving customer demand overall, and the variables provided. i.e. study and apply (similar) to "Example 12" found in our etext ... and answer the following:
a) Determine the ROP for this hotel?
b) What should be the safety stock quantity in order to sustain the service level?