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The president of the wholesale distributor is concerned about the possibility of stockouts causing a loss of customer confidence and loyalty and is interested in maintaining safety stock in inventory to prevent potential stockouts. Answer questions 23 through 25 based upon using the safety stock models.
1. Assuming demand is normally distributed with a mean of 15 units and a standard deviation of 3 units, and a constant lead time of 3 days, what is the reorder point necessary to provide a 97% level of service?
o 54.77
o 45.14
o 34.41
o 60.49
2. Assuming demand is constant at 15 units per day, and lead time is normally distributed with a mean of 3 days and a standard deviation of 1 day, what is the reorder point necessary to provide a 97% level of service?
o 80.48
o 64.87
o 73.21
o 53.18
3. Assuming that demand is normally distributed with a mean of 15 units and a standard deviation of 3 units, and lead time is normally with a mean of 3 days and a standard deviation of 1 day, what is the reorder point necessary to provide a 97% level of service?
o 59.69
o 81.20
o 66.46
o 74.86
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