Answer:
Reorder point: 1,476 units
Step-by-step explanation:
we should assure an inventory quantity which ensures sufficient sotck to avoid shortage 98% of the times.
we look into the normal distribution table for the value of z which accumulates: 0.98 this is 2.00
Now we solve for X with median of 264 and deviation of 105 per week
we should consider the lead time is 4 week thus:
Reorder point: median x L + z x √L x deviation
1,056 + 2 x √4 x 105 =
1,056 + 420 = 1,476