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What is the reorder point that corresponds to 80% service level?

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A depanneur stocks supplies of mineral water. Demand during lead time for cases of mineral water follows a normal distribution with a mean of 23 cases. Lead time is known to be 5 days. The standard deviation of daily demand is 2 cases. If the store manager has a policy of keeping a safety stock of 5 cases.
a) What is the service level for the current situation?
b) What is the reorder point that corresponds to 80% service level?

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Solution Summary

The reorder point that corresponds to 80% service levels are determined. Stock supplies of mineral water are analyzed.

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