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Nationwide Auto Parts uses a periodic review inventory

control system for one of its stock items. The review interval

is 6 weeks, and the lead time for receiving the materials

ordered from its wholesaler is 3 weeks. Weekly demand is

normally distributed, with a mean of 100 units and a standard

deviation of 20 units.

a. What is the average and the standard deviation of

demand during the protection interval?

b. What should be the target inventory level if the firm

desires 97.5 percent stockout protection?

c. If 350 units were in stock at the time of a periodic

review, how many units should be ordered?


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