Chez Paul Restaurant orders special Styrofoam "doggy bags" for its customers once a month (i.e. P) and lead time is one week (L). P+L demand for doggy bags is approximately normally distributed with an average of 600 bags and a standard deviation of 56. Chez. Paul wants at most a 3% chance of running out of doggy bags during the replenishment period. If he has 150 bags in stock when he places an order, how many additional bags should he order? What is the safety stock in this case?

a) Order 555 doggy bags. Safety stock is 105 bags,

b) Order 655 doggy bags. Safety stock is 115 bags

c) Order 550 doggy bags. Safety stock is 100 bags,

d) Order 565 doggy bags. Safety stock is 165 bags,

e) None of the above.

 

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