Mean Demand = 100

Std. Deviation = 15

You see your cookies as a critical item for bringing customers into your store. What should your order quantity and reorder point be if you want to ensure that you are in-stock 97.5% of all ordering cycles? How much safety stock will you need to hold to achieve that 97.5% service level? How much will it cost you to hold that amount of safety stock? What will be your total average inventory? Assume your supplier continues to deliver with a one-day lead time.