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A pharmacy in Lebanon stocks on Advil bottles that have variable lead times because of the difficulty in importing the product. Lead time is
A pharmacy in Lebanon stocks on Advil bottles that have variable lead times because of the difficulty in importing the product. Lead time is normally distributed with an average of 6 weeks and a standard deviation of 2 weeks. Demand is also variable and normally distributed with a mean of 200 bottles per week and a standard deviation of 25 bottles. a. What is the re-order point if the pharmacy is looking for an 80% service level? (7 points) b. The pharmacy did not forecast the lead time distribution properly. It turns out that the lead time is normally distributed with a mean of 6 weeks and a standard deviation of 5 weeks. What is the actuall service level if the pharmacy adopts the re-order point you calculated in part a? (8points)
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Step: 1
a To calculate the reorder point for a desired service level of 80 we need to find the zscore corres...Get Instant Access to Expert-Tailored Solutions
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