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A Food distributor decided to use the ROP system for determining when to place an order. The purchasing manager has determined that the monthly demand for crates of 8000 has a standard deviation of 200. The current supplier of the crates has a .25 month lead time. If the manager wants a 95% customer service level on the crates, what should the ROP be for this item?
1. What would the reorder point be for the paper?
2. If the manager was considering using a 99% customer service level how much more safety stock would it need compared to the 95% customer service level?
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