Pep Zone sells auto parts and supplies including a popular multi-grade motor oil. When the stock of this oil drops to 20 gallons, a replenishment order is placed.

The store manager is concerned that sales are being lost due to stockouts while waiting for a replenishment order.

It has been determined that demand during replenishment lead-time is normally distributed with a mean of 15 gallons and a standard deviation of 6 gallons.

1. The manager would like to know the probability of a stockout during replenishment lead-time. In other words, what is the probability that demand during lead-time will exceed 20 gallons? Show graphically and calculate the probability.

1. If the manager of Pep Zone wants the probability of a stockout during replenishment lead-time to be no more than 0.05 what should the reorder point be? Show graphically and calculate the probability.