DoorRed Pharmacy replenishes one of its best-selling drugs using a continuous review policy. Daily demand for the drug is normally distributed, with a mean of 300 and a standard deviation of 100. The wholesaler can supply a replenishment request in two days. The current replenishment policy is to order 1,500 units when there are 750 units on hand.
a. What is the cycle service level that DoorRed achieves with its policy?
b. What is the fill rate that DoorRed achieves with its policy?
c. What change in fill rate would DoorRed achieve if it increased its ROP from 750 to 800?