Question
Great Lakes Drugs is a pharmaceutical wholesaler to independent drugstores. The company wants to determine an optimal safety stock and reorder point policy for its
Great Lakes Drugs is a pharmaceutical wholesaler to independent drugstores. The company wants to determine an optimal safety stock and reorder point policy for its popular Breathe Easy brand of cold remedy. The lead time for the delivery of Breathe Easy from its manufacturer has averaged a constant eight working days. The demand for this product during the lead time is normally distributed with an average daily demand of 45 cases and a daily standard deviation of 8.5 cases.
How many units would the safety stock level increase by if the stockout rate is decreased from 5% to 2%?
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