Question: Kindly answer both part A and part B. No partial answers. 1) a) To achieve 95% service level you have to keep a safety stock

Kindly answer both part A and part B. No partial answers.

a) To achieve 95% service level you have to keep a safety stock of 429 pencils. Now if you want to increase your service level to 98%, by what percentage do you have to increase the safety stock? Assume Lead time demand for pencils is normally distributed.

b) You are travelling to the USA for your summer internship and need to convert INR to USD. Before your trip if you convert INR at bank you will get 2 USD for 150 INR. The exchange tax is much higher in the USA if you dont have sufficient USD and you need to convert INR to USD in the USA you will get 2 USD for 165 INR. Upon your return to India at the end of your trip, you can convert USD back to INR at a rate of 2 USD per 145 INR. You estimate that your expenditures in the USA will be normally distributed with a mean of 400 USD and standard deviation of 100 USD. How many INR should you convert to USD before leaving the capital?

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