Question: Acme distributor sells a special gaming computer keyboard model that is one of its hot selling items. It wants to ensure inventory is managed appropriately

Acme distributor sells a special gaming computer keyboard model that is one of its hot selling items. It wants to ensure inventory is managed appropriately for this item and wants to ensure a cycle service level of 99%. A continuous review inventory management policy is in place.

The item has a daily demand of 151 units per day on average, with a standard deviation of 29. The lead time to get replenished from the supplier is 8 days, and this lead time is constant (fixed).

What should be the reorder point (ROP) for this item using a continuous review inventory management policy?

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