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10. An inventory ordering system must be set up for Ointment CX- 30 based on the following data (assume the normal distribution): 50 tubes Average daily demand Standard deviation of demand Average lead time 6 tubes 5 days 1 day Standard deviation of lead time a. What safety stock would you recommend if a stockout risk of 10% is considered acceptable? b. What safety stock would you recommend if a stockout risk of 5% is considered acceptable? c. What is the reorder point for a service level of 98%? F10 E D F G H 50 tubes 6 tubes 5 days 1 day 10% B 1 M4-6(P11.10) 2 3 Average daily demand 4 Standard deviation of demand, od 5 Average lead time 6 Standard deviation of lead time, OLT 7 8 Is demand constant 9 Is lead time constant 10 Textbook formula to use 11 12 a. stockout risk 13 z 14 Safety Stock, SS 15 16 b. stockout risk 17 Z 18 Safety Stock, SS 19 20 c. stockout risk 21 z 22 Safety Stock, ss 23 Demand during lead time 24 Reorder point, ROP 25 26 5% 2%