Q1. Amy works as a procurement assistant for a restaurant. She has access to a rice supplier who allows her to place orders at any time. On average, the restaurant consumes 50 pounds of rice per day, with a standard deviation of 8 pounds. The supplier takes an average of 4 days to deliver the rice, with a standard deviation of 1.2 days. Amy decides to order 80 pounds of rice each time.

What is the safety stock that will enable Amy to maintain a 96% service level?

a. 73

b. 88

c. 97

d. 109

Q2. Kevin is playing an online game. He can only purchase the equipment in a weekly market that is open every Sunday morning. When Kevin places an order, he can receive the gear on the next day, which is Monday morning. On average, the equipment is consumed at a rate of 70 units per day with a standard deviation of 12. Kevin wants to ensure that there is only a 2% probability that he will run out of the equipment.

What would be the order-up-to level when he can place an order?

a. 490

b. 560

c. 630

d. 700