Determine the target inventory level

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Reference no: EM13105677

NOP Bicycle Parts uses a periodic review inventory control system for one of its stock items. The review interval is 6 weeks, and the lead-time for receiving the materials ordered from its wholesaler is 3 weeks. Weekly demand is normally distributed, with a mean of 100 units and a standard deviation of 20 units.
a. What is the average and the standard deviation of demand during the protection interval?
b. What should be the target inventory level if the firm desires 97.5 percent stockout protection?
c. If 350 units were in stock at the time of a periodic review, how many units should be ordered?

Reference no: EM13105677

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