First Printing has contracts with legal firms in San Francisco to copy their cou

Question

First Printing has contracts with legal firms in San Francisco to copy their court documents. Daily demand is almost constant at 12, 500 pages of documents. The lead time for paper delivery is normally distributed with a mean of 4 days and a standard deviation of 1 day. A 97% service level is expected. Compute First's ROP. Use data from THIS Problem, except assume the lead time for paper delivery is normally distributed with a mean of 3 days and a standard deviation of 0.5 days. SHOW ALL YOUR WORK AND THE RESULT SHOULD BE 49250

Explanation / Answer

We know that mean is 3 and SD is 0.5

thus Z value for 97% probability is calculated from the normal distribution table as 1.88

ROP = (Daily demand *Average lead time in days)+ Z *Daily demand *standard dev

ROP = (12,500*3) + (1.88)*(12,500)*(0.5)=49250

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