Calculate and report the required safety stock-OIL

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Reference no: EM133865994

Question

Angela's Italian Store in Downtown Edmonton orders many of their items, such as cold-cut meats, olives, and cheese, from Italy. A distributor stops by every three weeks to take orders. Let us focus on the inventory management of one their popular items: pepperoni. They sell, on average, 100 pounds of pepperoni every week. The standard deviation of weekly sales is 20 pounds. They promise high-quality products and high accessibility to their customers. So they have decided to limit the chance of stock-out to 2%. Imagine the distributor's representative is stopping today to take orders on pepperoni and there are currently 220 pounds of pepperoni in the store. The lead time for every order is two weeks.

1. Calculate and report the required safety stock, OIL, and the order size?

2. What is the probability that the store is going to run out of pepperoni until the new order arrives?

Reference no: EM133865994

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