We discussed in class a case when demand D = constant (say 10lbs of oranges/day), but lead time LT is positive (say LT = 4 days). In such a case, we would always order a batch size Q = EOQ, but we would order it appropriately early: when inventory drops down to D*LT (10 lbs/day * 4 days = 40lbs) we would order another batch. Thus reorder point of R = D*LT would guarantee that next batch arrives perfectly on time. (a) If demand is on average 10lbs/day, but can be either smaller or greater, then demand during 4 days will be random. What is the average of demand during 4 days? (b) If we still order when inventory reached 40 lbs, what is the chance that we do not run out of inventory when the next batch arrives? (We call it Service Level.) What is the chance that we will run out of inventory. (C) How should we change reorder point, if we want to increase the chances that we will not run out of inventory? (I.e., to have higher Service Level.)