Joe’s Donut Hole wishes to estimate an appropriate reorder point for cases of a raw material used in making donut icing. The average daily demand is 2 cases. The lead time for replenishment orders is 10 days with an estimated lead time demand standard deviation of 1 case. For a 95% service level, what should the reorder point for this item be?
a. 20
b. 21.64
c. 22
d. Reorder point cannot be determined from the information given
b. 21.64
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