Chicagos Hard Rock Hotel distributes a mean of 1,000 bath towels per day to guests at the pool and in their rooms. This demand is normally distributed with a standard deviation of 100 towels per day, based on occupancy. The laundry firm that has the linen contract requires a 2-day lead time. The hotel expects a 98% service level to satisfy high guest expectations.

(a) What is the ROP? What is the safety stock? (b) Suppose the manager is asked to reduce the above safety stock by 50%.

If she does so, what will be the new service level?