Problem $2$:

An Italian restaurant uses $2,000$ bottles of an imported wine each year. The

restaurant operates $50$ weeks per year, so the average weekly demand of the

imported wine is $40$ bottles. The lead time is three weeks, and the standard

deviation of demand during lead time $\backslash$sigma L $=25$ bottles.

The restaurant manager would like to use a Fixed $-$ Order Quantity inventory

system which minimizes inventory cost and provides a $96$ percent service

probability.

At what inventory level $($reorder point$)$ should the manager place an

order?