A retailer of computing products sells a variety of computer-related products. One of his most popular products is an HP laser printer. The average weekly demand is 200. Lead time for a new order from the manufacturer to arrive is 1 week. If the demand for printers were constant, the retailer would reorder when there were exactly 200 printers in inventory.
However, the demand is a random variable. An analysis of previous weeks reveals that the weekly demand standard deviation is 30. The retailer knows that if a customer wants to buy an HP laser printer but he has none available, he will lose that sale plus possibly additional sales. He wants the probability of running short in any week to be no more than 6%. How many HP laser printers should he have in stock when he reorders from the manufacturer?

  • CreatedFebruary 03, 2015
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