Question: H & K Electronic Warehouse sells a 12-pack of AAA batteries, and this is a very popular item. Demand for this is normally distributed, with

H & K Electronic Warehouse sells a 12-pack of AAA batteries, and this is a very popular item. Demand for this is normally distributed, with an average of 50 packs per day and a standard deviation of 16. The average delivery time is 5 days, with a standard deviation of 2 days. Delivery time has been found to be normally distributed. A 96% service level is desired.

(a) What is the standard deviation of demand during the lead time?

(b) How much safety stock should be carried, and what should be the reorder point?

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