Question: In a continuous review inventory system, the lead time for door knobs is 5 weeks. The standard deviation of demand during the lead time is

In a continuous review inventory system, the lead time for door knobs is 5 weeks. The standard deviation of demand during the lead time is 85 units. The desired cycle-service level is 99 percent. The supplier of door knobs streamlined its operations and now quotes a 1-week lead time. How much can safety stock be reduced without reducing the 99 percent cycle-service level?
18. In a two-bin inventory system, the demand for 3-inch lag bolts during the 2-week lead time is normally distributed, with an average of 53 units per week. The standard deviation of weekly demand is 5 units.
a. What is the probability of demand exceeding the reorder point when the normal level in the second bin is set at 130 units?
b. What is the probability of demand exceeding the 130 units in the second bin if it takes 3 weeks to receive a replenishment order?

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