A firm has determined that its optimal EOQ ordering quantity is 1,250 units for a certain product. Average daily demand is 90 units with a standard deviation of 8 units. Order lead time is 7 days. To maintain a 95% service level, what should the target inventory level be?
a. 1,250
b. 1,940
c. More than 2,000
d. Target inventory level cannot be determined from the information given
b. 1,940
Business
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