Answer:
The restocking level is 113 tins.
Step-by-step explanation:
Let the random variable X represents the restocking level.
The average demand during the reorder period and order lead time (13 days) is, μ = 91 tins.
The standard deviation of demand during this same 13- day period is, σ = 17 tins.
The service level that is desired is, 90%.
Compute the z-value for 90% desired service level as follows:
[tex]z_{\alpha}=z_{0.10}=1.282[/tex]
*Use a z-table for the value.
The expression representing the restocking level is:
[tex]X=\mu +z \sigma[/tex]
Compute the restocking level for a 90% desired service level as follows:
[tex]X=\mu +z \sigma[/tex]
[tex]=91+(1.282\times 17)\\=91+21.794\\=112.794\\\approx 113[/tex]
Thus, the restocking level is 113 tins.
