Demand for a product is relatively constant at 5 units per day. Lead time for this product
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Question:
Demand for a product is relatively constant at 5 units per day. Lead time for this product is normally distributed with a mean of 20 days and a standard deviation of 4 days.
| (a) | What reorder point provides an 80 percent service level? |
| (b) | What reorder point provides a 90 percent service level? |
| (c) | If the lead time standard deviation can be reduced from 4 days to 1, what reorder point now |
provides 90 percent service? How much is safety stock reduced by this change?
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