Consider the previous scenario's parameters: lambda = 1,200; ordering cost = $20; unit cost = $28; unit revenue = $45; and holding cost = 30% of unit cost. Upon closer inspection, the supplier from determines that the daily demand for batteries is normally distributed as N(4, 9). The supplier is open 300 days per year (this is where we get lambda = 1,200), and it usually takes about 4 days to receive an order from the factory.

What is the optimal service level?

Select one:

a.

0.9605

b.

0.9697

c.

0.9792

d.

0.9728