Question: Dunstreet's Department Store would like to develop an inventory ordering policy of a 90 percent probability of not stocking out. To illustrate your recommended procedure,

Dunstreet's Department Store would like to develop an inventory ordering policy of a 90 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets.

Demand for white percale sheets is 4,300 per year. The store is open 365 days per year. Every four weeks (28 days) inventory is counted and a new order is placed. It takes 9 days for the sheets to be delivered. Standard deviation of demand for the sheets is five per day. There are currently 100 sheets on hand.

How many sheets should you order? (Use Excel's NORMSINV() function to find the correct critical value for the given -level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)

Hint: First convert annual demand D to avaerage daily demand d bar.

Number of sheets

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