Question: Demand for a particular tablet at an electronics store has recently surged, and the store manager must recalculate at what inventory level to replenish it.

Demand for a particular tablet at an electronics store has recently surged, and the store manager must recalculate at what inventory level to replenish it. The manager wants a probability of at least 96 percent of not having a stockout during a lead time. The manager expects demand to average a dozen units a day and to have a standard deviation of two units a day. Purchase lead time is variable, averaging four days with a standard deviation of one day. Assume demand during a lead time is Normal. At what inventory level (On hand+ On order) should the manager reorder to achieve the desired service level probability?

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