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Once a dentist orders supplies from her supplier, it takes 20 days to receive them (i.e., the lead time is 20 days). A quick check of the stock of anesthetic indicates that 900 bottles are on hand. Daily usage of the anesthetic is approximately normally distributed with a mean of 40 bottles and a standard deviation of 10 bottles.
(a) Characterize the lead time demand distribution for the anesthetic (i.e., write down the distribution, its parameters). [3 pts]
(b) If the dentist orders today, is she going to be able to achieve her service level target of 96%?
Verified Expert
The question is all about lead time which helps to maintain the optimum stock till the delivery of next order. It helps to ensure regular flow of goods and also there is no blockage of money by mainintaing unnecessary stock
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