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Inventory Management in Hospital Supplies

Please provide an answer to the problem below and make sure to show all the work as to how the answer was derived.
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Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 7. Ms. Flynn would like to maintain a 90% service level.

a. What safety stock level do you recommend for BX-5?
b. What is the appropriate reorder point?

Solution Preview

Hi,

Please see response to your posting as given below.

Mean demand during lead time = 60
Standard deviation of demand = 7

Service level required = 90%
For 90% find out value Z from ...

Solution Summary

Solution describes how to calculate safety stock and reorder point.

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