1. The daily demand for a product is distributed normally with a mean of 100 units and a standard deviation of 30 units. The supply lead time is 4 days. The company is considering the following two alternatives for its inventory management system:

Alternative 1: Order 600 units every time the inventory level drops to 430 units

Alternative 2: Place an order every 6 days

1. Compute the safety stock and fill rate for Alternative 1.
2. Assume that the target fill rate for Alternative 2 is the same as the fill rate for Alternative 1 in part (a). Compute the safety stock for Alternative 2.
3. Which inventory management system (Alternative 1 or Alternative 2) places orders more frequently?