A firm uses a base stock policy to manage inventory for an i…

A firm uses a base stock policy to manage inventory for an item.  The order-up-to level has been set at 200 units.  It is time to order now, and our inventory system tells us that we have 75 of the item on-hand and that we also have 50 of the item already on-order.  How many should we order today?

Richard’s Convenience Store orders two-liter bottles of root…

Richard’s Convenience Store orders two-liter bottles of root beer on a weekly basis.  Weekly demand for root beer is 50 units with a standard deviation of 5 units.  The holding cost is $0.50 per bottle per week and a 0.99 in-stock probability is desired.  What will be the effect on the average on-hand inventory of root beer if lead time decreases from 2 weeks to 1 week?