Illustrate what should the reorder point be

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Q. Thomas' Bike Shop stocks a high volume item that has a normally distributed demand during the reorder period. The average daily demand is 70 units, the lead time is 4 days and the standard deviation of demand during the reorder period is 15.

a. Explain how much safety stock provides a 95% service level to Thomas?

b. Illustrate what should the reorder point be?

 

 

Reference no: EM1374209

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