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Weekly demand for HP printers at a Sam’s Club store is normally distributed with a mean 250 of and a standard deviation of 150. The store manager continuously monitors inventory and orders 1,000 printers each time the inventory drops to 600 printers.
A) If the supplier takes two weeks to fill an order, what CSL does Sam’s Club achieve as a result of this policy? What is the safety stock? What is the corresponding fill rate?
B) Assume that the CSL is 0.95 and that the supply lead time from HP is normally distributed with a mean of two weeks and a standard deviation of 1.5 weeks. In this case, what is the safety stock? How does the required safety inventory changed?
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