The Acme Catalogue Company resells a wide variety of products that they purchase from other companies. One of their best selling products has an average demand of 200 units per week and a standard deviation of demand equal to 50 units per week. The manufacturer of the product, CTI Incorporated, is very reliable with their shipments for Acme, but requires a 10 day lead time.

1. If Acme wishes to achieve a 95% service level, what reorder point should they use? (Both Acme and CTI operate 7 days per week).

1. Assume the average demand for item PPP is 10 units per day with a standard deviation of 4 units per day. If the standard deviation of demand during lead time is 16 units, what is the implied lead time?

1. Trader Joe knows that daily demand for the new IU sweatshirt is normally distributed with a mean of sixty sweatshirts and a standard deviation of two sweatshirts. He also knows the lead time is nine days. If the reorder point is 549 sweatshirts, what is the implied service level?