Question: Consider the plastic bottles demand pattern, A bottling plant uses approximately 3,000 plastic bottles per day (normally distributed), while daily usage has a standard deviation

Consider the plastic bottles demand pattern, A bottling plant uses approximately 3,000 plastic bottles per day (normally distributed), while daily usage has a standard deviation of 55. Order lead time is 3 days (constant). Suppose we plan to set up a periodic review inventory system instead, and we will order this item every 9 days. Order lead time is still the same. This is all one problem.

a. What is the protection interval?

b. What is the average demand during the protection interval?

c. What is the standard deviation of demand during the protection interval? Round your answer to the nearest two decimal points.

d. Using this periodic review system, what order up to level (T) would result in 100 units of safety stock? Show all your work.

e. What is the predicted service level under this safety stock value?

f. What order up to level is needed to provide 99% predicted service level? How much safety stock is associated with this policy?

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