Question: Demand during lead time is normally distributed with mean = 100 and standard deviation = 30. 1. If I set my order point to R

Demand during lead time is normally distributed with mean = 100 and standard deviation = 30.

1. If I set my order point to R = 175:

  • What is my safety stock?
  • What is my service level?
  • What is my stockout probability?

2. Repeat above for R = 185

3. If I want a 90% service level:

  • What value of R should I use?
  • How much safety stock will I be carrying?
  • What is my stockout probability?

4. Repeat for a 99.5% service level

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