Chicago’s Hard Rock Hotel distributes a mean of 1,000 bath towels per day to guests at t
he pool and in their rooms. This demand is normally distributed with a standard deviation of 100 towels per day, based on occupancy. The laundry firm that has the linen contract requires a 2-day lead time. The hotel expects a 98% service level to satisfy high guest expectations.
(a) What is the ROP?
(b) What is the safety stock?