How much safety inventory of cell phones

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Reference no: EM13784920

1. Weekly demand for iPhones at a store is normally distributed with a mean of 300 and a standard deviation of 200. Apple takes two weeks to supply an order for these phones. The store is targeting a CSL of 95 percent and monitors its inventory continuously. How much safety inventory of cell phones should the store carry and what should its reorder point (ROP) be?

Sub-part:

If the store had a policy of ordering cell phones from Apple in lots of 5000, what fill rate would the store achieve with the safety stock you calculated in question above? Why is this fill rate identical to (or greater than or lower than) the CSL in question above?

Reference no: EM13784920

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