Daily Demand for a Product Is Normally Distributed with a Mean

question 105

Essay

Daily demand for a product is normally distributed with a mean of 150 units and a standard deviation of 15 units.The firm currently uses a reorder point system,and it seeks a 75% service level during the lead time of 6 days.
a.What safety stock is appropriate for the firm?
b.What is the reorder point?

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Definitions:

Sales Managers

Sales personnel who have oversight of selling efforts at varying levels of the organizational hierarchy.

CPM

Short for Cost Per Thousand, a marketing term that refers to the price of 1,000 advertisement impressions on one webpage.

Organizational Marketing

It refers to the marketing strategies and efforts aimed at promoting and selling products or services to other organizations, businesses, or institutions rather than individual consumers.

Goods And Services

Products and activities provided by businesses to satisfy the needs and wants of consumers.