What is the average inventory

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Consider a distributor of TV sets that orders from a manufacturer and sells to retailers. The distributor faces a demand with a mean of 70 units per week and a standard deviation of 30. Suppose the distributor places an order for TV sets every two weeks. The manufacturer promises a lead time of 1 week for every order.

-If the distributor wants a 97% service level, what is the base stock level that the distributor should target? What is the average inventory?

-If the distributor wants a 95% service level, will the base stock level increase or decrease? (No need to calculate)

-If the distributor places orders every 3 weeks, will the base stock level increase or decrease? (No need to calculate)

Reference no: EM132730094

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