Question: Weekly demand for a VR Headset retailer has a mean of 2 0 units. The supplier has a lead time of 1 5 weeks. The

Weekly demand for a VR Headset retailer has a mean of 20 units. The supplier has a lead time of 15 weeks. The cost of placing an order to the supplier each time is $40, and annual holding cost for one unit is 20 percent of the Cost of Goods. Each headset costs the retailer $1,040. Assume 52 weeks in a year.
Assume there is a weekly standard deviation in demand of 5 units (Chapter 11).
If we have on average 25 units of on-hand inventory, what is our stock-out probability?

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