(Answered) The rugged jeans company uses on average 20 rolls of denim

Management Studies

The rugged jeans company uses on average 20 rolls of denim daily in its manufacturing process. The amount of denim used is normally distributed with a stand deviation of 2 rolls. The company orders the denim from its supplier every 7 days on Monday morning and it takes 2 days to receive the order. One Monday morning, the company has 5 rolls of denim in its inventory. Rugged Jeans would like to limit the probability of a stock out to 5%. What type of inventory model is suitable for this problem? How many rolls of denim should be ordered at this time? What is the safety stock for the denim used? If instead the store wants to reduce the probability of a stockout to 1%, how many rolls of denim should be ordered?

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