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.

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

		1
		0.915
		0.423
		None of the options
		0.04

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.

Suppose the store decides to cut their lot size in half. What is the new cost of understocking if the desired service level is 97.9%?

		0.457
		0.915
		None of the options
		1
		0.04

23.

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.

Suppose the store loses all demand during a stockout and each lost sale results in a loss of $2 profit. What is the customer service level?

		Between 96% and 98%
		Less than 92%
		Greater than 98%
		Between 92% and 94%
		Between 94% and 96%