Problem 4 Consider Item Whose Inventory Controlled Continuous Review Q R Policy Suppose Le Q34666871

Problem 4 Consider an item whose inventory is controlled by a continuous review, (Q, R) policy Suppose the lead time is 5 days, Q = 100, and daily demand is normally distributed with mean 10 and standard deviation 2. The desired service level, no stockout probability, is 0.98 a. Suppose the lead time is primarily transportation time, and you have an alternative option to use premium transportation that would reduce the lead time to 2 days. Suppose you can use only one option either the premium transportation or the slow transportation mode. How would you decide what to choose? Outline an analysis to help you making the choice. b. Suppose you could use both options, e. g., ship part of your order by the slow mode and part by the fast mode. Would you ever want to do this? and Why? Show transcribed image text