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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 5 weeks and a standard deviation of 1 week. Demand is a variable with normal distribution with mean of 100 cigars per week with a standard deviation of 10 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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Operation Management, Management Studies

Category:- Operation Management
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