Question: Average weekly demand for free range dog biscuits is 80 bags

Average weekly demand for free-range dog biscuits is 80 bags per week, with a standard deviation of 16 bags. Ollah uses a continuous inventory review system to manage inventory of the biscuits. Ollah wants to set the reorder point high enough that there is only a 5% chance of running out before the next order comes in. Assuming that the lead time is a constant 2 weeks, what should the reorder point be?

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  • CreatedApril 10, 2015
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