Demand for item is normally distributed with mean

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Demand for an item is Normally distributed with a mean of 400 units a week and a standard deviation of 60 units. Ordering and delivery cost $300, holding cost is $12 a unit a year and lead time is constant at 3 weeks. Describe an ordering policy that gives a 95 per cent cycle-service level. What is the cost of holding the safety stock in this case? How much would costs rise if the service level is raised to 98 per cent?

Reference no: EM132077569

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