Dan have to increase safety stocks to achieve this goal

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Reference no: EM132113797

Dan’s Dog Diner (DDD) is a low-key restaurant selling hot dogs and a long-time neighborhood favorite. DDD keeps an inventory of its best-selling product, the foot-long Frankfurter, in the freezer and reorders as needed when inventory runs low. Specifically, Dan’s rule of thumb is to place another order when there are only 100 sausages left. Average daily demand is 30 units with a standard deviation of 10 units, and the average replenishment lead time is two days with a standard deviation of 1 day. Lately, Dan has noticed that he runs out of foot-long Frankfurters nearly three times a month, on average. Wanting to keep his customers happy, Dan decides to strive for a 99% in-stock rate moving forward. By how many units will Dan have to increase safety stocks to achieve this goal?

Reference no: EM132113797

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