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Weekly demand for a Motorola cell phone at a Best Buy store is normally distributed, with a mean of 200 and standard deviation of 150. Best Buy has a policy of ordering the cell phones in lots of 500. Motorola takes two weeks to deliver an order. If Best Buy is targeting a CSL of 95 percent and monitors its inventory continuously:

a. How much safety inventory of cell phones should Best Buy carry?

b. What should its ROP be?

If Best Buy is targeting a fill rate of 99 percent and monitors its inventory continuously:

c. How much safety inventory of cell phones should Best Buy carry?

d. What should its ROP be?

Operation Management, Management Studies

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