Periodic review inventory system-determine order quantity

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Greg’s Pharmacy uses a periodic review inventory system. Every Friday, the pharmacist reviews her inventory and determines the size of the replenishment order. For example, she knows that demand for 500-mg metformin tablets, a drug for diabetics, is normally distributed with a mean of 6,000 tablets each week with a standard deviation of 500 tablets per week. Lead time is three weeks. The desired cycle-service level is 95 percent (z = 1.645). There are currently no outstanding orders.

A) Determine the order quantity (Q).

B) How many tablets should be ordered if the current inventory of metformin is 19,000 tablets?

Reference no: EM13954754

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