Clothing retailer makes staple black shirts

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A clothing retailer makes staple black shirts that are always in demand. They order this shirt on a perpetual basis from a vendor in Bangladesh. The lead time to source an order is 2 months (including shipping time). There is a fixed cost to place the order of $2000 per order, and there is also holding cost of $1/unit/month. Expected demand per month= 4000 units, with stdev of 500 units. Because this is a staple item, the retailer aims for 98% in-stock rate for this item. What is the safety stock?

Reference no: EM133506561

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