Answer:
Option (A) is correct.
Explanation:
Given that,
Mean daily demand, M = 20 calculators per day
Standard deviation, SD = 4 calculators per day
Lead time for this calculator, L = 9 days
z-critical value (for 95% in-stock probability) = 1.65 (From z tables)
Normal consumption during lead-time:
= Mean daily demand × Lead time
= 20 × 9
= 180 units of calculator
Safety Stock = z value × SD × L^(0.5)
= 1.65 × 4 × (9)^(0.5)
= 1.65 × 4 × 3
= 19.8 units
Reorder Point = Normal consumption during lead-time + Safety Stock
= 180 units + 19.8 units
= 199.8 or 200 units (Approx)
