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What amount of safety stock is appropriate

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Question - A dry cleaning firm uses an average of 20 gallons of cleaning fluid a day. Usage tends to be normally distributed with a standard deviation of two gallons per day. Lead time is exactly four days, and the desired service level is 92 percent.

If the firm is using a periodic review system and cleaning fluid is reordered every 45 days, what amount of safety stock is appropriate?

Refer to the information of LQ2 above. If the firm is using a continuous review system, determine the re-order point.

Reference no: EM133089278

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