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One of the most - often sold items at a grocery store is milk. The daily demand for milk at a local grocery store is

One of the most-often sold items at a grocery store is milk. The daily demand for milk at a local grocery store is 2800 half gallon jugs that sell for $1.3 each. The standard deviation in demand is 310 half gallon jugs per day, and the holding costs can be estimated at 7% per day (i.e., cooling cost, as well as the cost of having to throw out milk that has passed its sell-by date). The cost for an order is $94 based on the fee paid to the party that delivers the milk (who needs three days to deliver a new batch). Determine the reorder point for a 95% service level.

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