Weekly demand at a beer store is 200 cans with a standard deviation of 50. The replenishment lead time is 1 week from the factory. The store manager orders 1000 cans when the inventory drops to 300. Each can costs $0.50. The holding cost the store incurs is 40%. Demand during stockout is backlogged.

What is the mean and standard deviation of demand during lead time? a) 20 ; 050 b)50 ; 200 c)60 ; 087 d)None of the options e)87 ; 600

What is the customer service level? a)0.49 b)None of the options c)0.98 d)0.89 e)1

Suppose the store decides to cut their lot size in half. What is the new customer service level? a)0.49 b)0.98 c)0.89 d) None of the options e)1

What is the cost of understocking if the desired service level is 97.9%?a) 0.915 b)None of the options c)1 d)0.04 e)0.423

Suppose the store decides to cut their lot size in half. What is the new cost of understocking if the desired service level is 97.9%?a) 0.457 b)0.04 c)1 d)None of the options e)0.915

Suppose the store loses all demand during a stockout and each lost sale results in a loss of $2 profit. What is the customer service level?a) Between 94% and 96% b)Less than 92% c)Between 96% and 98% d)Greater than 98% e)Between 92% and 94%