Using the fixed time period model, Daily demand for a product is $10$ units with a standard deviation of $5$ units. The review period is $20$ days and the lead time is $10$ days. Management has set a policy of satisfying $98$ percent of demand Factor $=2\mathrm{.}05$ from items in Stock. At the beginning of the review period there are a $6$ units in Inventory.

$q\frac{?}{b}=ar(d)(T+L)+z{}_{T+L}-I$

$q=$ Quantity to be ordered

$T=$ The number of days between reviews

$L=$ Lead time in days $($time between placing an order and receiving it$)$

$\frac{?}{\text{b}\text{a}\text{r}}(d)=$ Forecast average daily demand

$z=$ Number of standard deviations for a specified service probability

${}_{T+L}=$ Standard deviation of demand over the review and lead time

$I=$ Current inventory level $($includes items on$-$order$)$

Start by finding

${}_{T+L}=\sqrt[\phantom{2}]{(T+L){}_d^2}$