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Consider a continuous review inventory system. Demand is normally distributed with an average of 13,600 per month and a monthly standard deviation of 225 units. Lead time is one week (assume 4 weeks per month). If the firm desires a 97% CSL, how many units of safety stock should be held, and what re-order point ) should be used? (Keep 3 decimals for the standard deviation, but round and to the nearest whole number.)
What concepts and constructs may you employ to study this phenomenon? How are any of aforementioned concepts and/or constructs related to explanatory hypotheses?
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