One is to use exponential smoothing when forecasting the demand for a product.

The forecast is updated once every week.

The smoothing constant for the demand forecast is $0\mathrm{.}1.$

The smoothing constant for MAD is $0\mathrm{.}2$

Last week the forecast demand was $250$

Last week the MAD was $30$

The observed demand during this week is $230.$

The lead time is $3$weeks$.$

Forecast errors during different weeks are independent of each other.

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With the above information we get that

$-$The updated demand forecast for newt week I $248$units$.$

$-$The updated forecast for MAD is $28$

$-$and the forecast for the total demand during the next $3$weeks are $744$

Assume that the inventory for the product is controlled by an $($R$,$Q$)$ policy with continuous review. Assume that Q$=120$and that the demand during the lead time follows a normal distribution. Determine the lowest value of safety stock, SS$,$such that both S$\_1$ and S$\_2$ are at least $95\%$