Question: The daily demand for a component assembly item is normally distributed with a mean of 120 and standard deviation of 15. Furthermore, the source of

The daily demand for a component assembly item is

The daily demand for a component assembly item is normally distributed with a mean of 120 and standard deviation of 15. Furthermore, the source of supply is reliable and maintains a constant lead time of four days. If the cost of placing the order is Rs. 45 and the annual carrying charges are Rs. 0.75/unit, find the order quantity and reorder point to provide an 85 percent service level. Service level is interpreted as the probability that there will be a stockout of any size during lead time. Unfilled orders are filled as soon as an order arrives. Assume sales occur over the entire year

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