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26-10-2020
Business

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Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: Lead time is normally distributed with an average of 6 weeks and a standard deviation of 3 weeks. Demand is also a variable and normally distributed with a mean of 250 cigars per week and a standard deviation of 26 cigars.

a. For a 90% service level, what is the ROP?

b. What is the ROP for a 95% service level?

c. Explain what these two service levels mean. Which is preferable?

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28-10-2020

Answer:

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