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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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

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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