Question: Halifax Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: Lead time is normally distributed with an

Halifax Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: Lead time is normally distributed with an average of six weeks and a standard deviation of two weeks. Demand is also a variable and normally distributed with a mean of 200 cigars per week and a standard deviation of 25 cigars.
a) For a 90% service level, what is the ROP?
b) What is the ROP for a 95% service level?
c) Explain what these two service levels mean. Which is preferable?

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a Both lead time and demand are variables so Equation 1217 applies in weeks ... View full answer

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