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Assignment:
Ye' Olde Barrel Shop sells oak barrels to a local winery. The Master Cooper would like to reduce her oak lumber inventory by determining the optimal number of oak boards to order. The annual demand averages 10,125 boards and the order cost is $24.00 per order. Holding cost is estimated to be 15%. The purchase cost of each board is $8.00. The standard deviation of daily demand is 10 boards. The standard deviation of lead time is 1.5 days. Assume 260 days in the year and an average lead-time of 6 days.
I found the EOQ already but I have a different question which says:
If a service level of 90% is desired during the reorder interval, what is the statistical reorder point?
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