Suppose a busy garden store sells mulch in bulk to lawn and garden service companies. The average demand is 500 cubic yards per day with a standard deviation of 35 per day. Suppose the lead time from their supplier averages 6 days with a standard deviation of 2 days. The garden store operates 365 days a year and inventory is managed with a continuous review policy.  

a) If a 99% service level is desired, then what would be the reorder point? Show all your work. Reorder point = ________  

b) Suppose the garden store orders 2500 cubic yards each time. How many orders per year do they make, and with a 96% service level on average how many stockouts do they expect in a year? 

Show all your work. Number of orders per year = ________ Stock outs per year = ________