Daily Demand for a Product Is Normally Distributed with a Mean

question 81

Essay

Daily demand for a product is normally distributed with a mean of 55 units and a standard deviation of 6 units. The firm currently uses a reorder point system, and seeks a 75% service level during the lead time of 4 days.
a. What safety stock is appropriate for the firm?
b. What is the reorder point?

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Definitions:

Observational Learning

The process of learning new behaviors or information by observing others.

Albert Bandura

A psychologist known for his work on social learning theory, indicating that people learn within a social context, largely through observation and imitation.

Pioneering Researcher

An individual who leads or initiates new areas of study or discovery in their field of expertise.

Albert Bandura

A psychologist renowned for his work in social learning theory, most notably the concept of observational learning and the Bobo doll experiment.