Question: Weekly demand at a beer store is 200 cans with a standard deviation of 50. The replenishment lead time is 1 week from the factory.

Weekly demand at a beer store is 200 cans with a standard deviation of 50. The replenishment lead time is 1 week from the factory. The store manager orders 1000 cans when the inventory drops to 300. Each can costs $0.50. The holding cost the store incurs is 40%. Demand during stockout is backlogged.

Mean and Standard Deviation? Answer: 60:087

What is the customer service level? Answer: 0.98

What is the cost of understocking if the desired service level is 97.9%?******

What is the cost of understocking if the desired service level is 97.9%?

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