Wallys World orders a 10day supply of ice cream whenever onh

Wally’s World orders a 10-day supply of ice cream whenever on-hand inventory falls below the reorder point. Lead time for ice cream is one day. On Monday, September 30, the clerk found 18 gallons of ice cream in stock. The sales are normally distributed with a mean of 20 gallons per day and a standard deviation of 9 gallons per day. Desired customer service level is 99 percent. How many gallons of ice cream should be ordered on September 30 if the store is open five days per week?

Solution

First calculate the reorder point

X(z) = (100-99)(200)/(100*9) = -2237

reorder point = 20+(.37)*9 =23.33 gallons

safety = 3.33 gallons

so , number that should be ordered = 3.33 * 5 = 16.65