Question: Bell computers purchases IC chips from a supplier. The supplier promises an average lead time of ten days with a standard deviation of 2 .

Bell computers purchases IC chips from a supplier. The supplier promises an average lead time of ten days with a standard deviation of
2
.
5
days. Based on past Bell has estimated that daily demand is normally distributed with a mean of
1
9
.
2
and a standard deviation of
4
.
5
.
1
.
If Bell wants to maintain a service level of
9
7
%
how much safety stock should they hold? What is the reorder point?
2
.
If Bell wants to hold
5
days of inventory as safety stock what will their service level be
?

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