Question: One item a computer store sells is supplied by a vendor who handles only that item. Demand for that item recently changed, and the store

One item a computer store sells is supplied by a vendor who handles only that item. Demand for that item recently changed, and the store manager must determine at what inventory level to replenish it. Tire manager wants a probability of at least 96 percent of not having a stock-out 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. 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 should the manager reorder to achieve the desired service level probability?

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