A Firm stocks a certain item for which inventory management is fixed order quantity. The firm’s management has not decided on an appropriate service level for this item. Demand averages 230 units per day with a standard deviation of 45 units per day. Lead-time is fixed at 10 days.

1) If the service level is set at 50 percent, the recorder point for this item would be approximately:

450 units

2395 units

230 units

2300 units

2. If the firm sets the ROP to 2400 units, the Service level will be

2482 units

.8413

.7580

.9217

None of the above

3. Comparing a 90 percent service level to a 99 percent service level, the Safety stock will be approximately

149 units greater at 99% that at 90%

184 units greater at 99% than at 90%

132 units greater at 90% than at 99%

149 units greater at 90% than at 99%