Question: You may need to use the appropriate technology to answer this question. A health and nutrition store stocks a multivitamin with an annual demand of

You may need to use the appropriate technology to answer this question.
A health and nutrition store stocks a multivitamin with an annual demand of 1,000 bottles has
Co = $23.50
and
Ch = $9.
The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with
=25
and
=5.
(a)
What is the recommended order quantity? (Round your answer to the nearest integer.)
72
72
(b)
What are the reorder point and safety stock if the store desires at most a 4% probability of stock-out on any given order cycle? (Round your answers to the nearest integer.)
reorder point34
34
safety stock9
9
(c)
If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? (Round your answer to four decimal places.)
0.1587
0.1587
How many times would you expect a stock-out during the year if this reorder point were used? (Round your answer to the nearest integer.)
2
2

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