Question: Demand for Company A is relatively stable at an average of 1000 units per week, with an estimated standard deviation of 150 units for the

Demand for Company A is relatively stable at an average of 1000 units per week, with an estimated standard deviation of 150 units for the weekly demand. Company A plans to set its reorder point at 1000 units, which equals the average weekly demand Company A faces. The delivery lead time is 7 days (i.e. one week). Which of the following is NOT true? If Company A keeps 1000 units on hand during the 7-day supplier lead time, Company A has a 50% chance of having leftover inventory when supplier delivers the new order. Company A should set a reorder point higher than 1000 in order to have a positive safety stock buffer. 1000 is the optimal reorder point for Company A to set. If Company A keeps 1000 units on hand during the 7-day supplier lead time, Company A has a 50% chance of running out of inventory before the supplier delivers the new order

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