What is the amount of safety stock for phones

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Weekly demand for cell phones at a retailer is normally distributed with a mean of 150 phones and a standard deviation of 75. The retailer replenishes inventory by ordering from a distributor, with a lead time of two weeks. Currently, the store continuously monitors the inventory of phones, and achieves an in-stock probability of 95%.

a. What is the amount of safety stock for phones?

b. If the reorder point was set to 400 cell phones, the in-stock probability would be at least how much? 4 decimal places

c. If the fixed ordering cost from the suppliers is $100, and the weekly holding cost per phone is valued at $1.50. What should be the optimal order quantity?

Reference no: EM132708668

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