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The weed killer company uses 30 gallons (demand rate) of weed kill per day. The supply of weed kill is replenished when the amount on
The weed killer company uses 30 gallons (demand rate) of weed kill per day. The supply of weed kill is replenished when the amount on hand is 170 gallons (reorder point). After an order is placed, it takes about 4 days on average to receive the order. Safety stock is 50 gallons which provides a stock out risk of 9.01%. What amount of safety stock would provide a stock out risk of 4.01%?
Assume the lead time is distributed normally therefore the lead time will have a standard deviation that you need to initially solve for.
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