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One of the hot sellers for the Wonka Toy store is the Chocolate Factory Board Game. The store uses a periodic review inventory system. The review period for the board game is 1 month, while the lead time to obtain the board game is 1 week. The demand for the board game is normally distributed with a mean of 800/month and a standard deviation of 20/week. If the store uses a target inventory of 1055, what service level is being achieved? (Assume there are 4 weeks in a month).
Harvey Gold, the owner of Harvey's Specialty Shop, orders an unusual olive from the island of Santorini, off the Greek coast. Over the years, Harvey has noticed considerable variability in the time it takes to receive the orders of these olives. On average, the order lead time is four months and the standard deviation is six weeks (1.5 months). Monthly demand for the olives is normally distributed with mean 15 and standard deviation 6. Harvey is willing to accept no more than a 6 percent risk of stockout during the leadtime. Determine the Reorder point (ROP) for this data?
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