Let’s return to the Romano Chocolates Boutique, which, as stated, orders chocolates from a supplier in Belgium. Demand for the chocolates is relatively constant at 20 boxes per day. The lead time of these chocolates fluctuates but is normally distributed with a mean of 15 days and a standard deviation of 5 days:

1. If the desired service level is 50%, what is the reorder point?

2. What is the reorder point if the desired service level is 95%?

3. If the standard deviation in the lead time can be reduced from 5 days to 3, what reorder point now provides a 95% service level? How does a 95% service level affect the safety stock?