Please show the math/work below:
You are the owner of Hotspices.com, an online retailer of hip, exotic, and hard-to-find spices. Consider your inventory of saffron, a spice (generally) worth more by weight than gold. You order saffron from an overseas supplier with a shipping lead time of four weeks and you order weekly. Average weekly demand is normally distributed with a mean of 40 ounces and a standard deviation of 30 ounces.
d.
Suppose it wants a .96 in-stock probability. What should its order-up-to level be?
Expert Answer
Period length = 1 week
Lead time L = 4 weeks
Expected demand over (L+ 1)
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