Tracy McCoy is the office administrator for the department of management science at Tech. The faculty uses a lot of printer paper, although Tracy is constantly reordering, paper frequently runs out. She orders the paper from the university central stores. several faculty members have determined that the lead time to receive an order is normally distributed, with a mean of 2 days and a standard deviation of 0.5 day. The faculty gas also determined that daily demand for the paper is normally distributed, with a mean of 2 packages and a standard deviation of 0.8 package. What reorder point should Tracy use in order not to run out 99% of the time?
Re-order point = Average Lead Time*Average Demand + Z*SQRT(Avg. Lead ...
This posting offers help with calculating reorder point.