Average demand is also normally distributed

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A cigar company stocks Cuban cigars that have variable lead times because of the difficulty in importing the product. Lead time is normally distributed with an average of 4 weeks and a standard deviation of 1 week. Average demand is also normally distributed with a mean of 200 cigars per week and a standard deviation of 27 cigars. a. For a 90% service level, what is the ROP? b. What is the ROP for a 98% service level? c. Explain what these two service level mean. Which is preferable?

Reference no: EM13778854

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