Question $6$

$3$ pts

Kate's Mini$-$Mart uses a periodic review, order$-$up$-$to inventory model to manage inventory. For one of their more popular products, Tofu Jerky, Kate $($the owner$)$ insists on maintaining a $90\%$ cycle service level. The supplier has a $4$ week lead time $($with no randomness$).$ Average demand is expected to be $60$ per week. Standard deviation of forecast errors is expected to be $25.($Please use the Gamma distribution to model demand during the exposure period.$)$ In order to have more free time for her many hobbies, Kate would like to reduce her administrative effort by ordering less frequently. By how much would safety stock increase by switching from ordering every $2$ weeks to ordering every $4$ weeks? $($You can ignore the decimals in the final calculation$)$

$11\%$

$18\%$

$50\%$

$15\%$