A pharmacy replenishes one of its best-selling drugs using a continuous review policy. daily demand for the drug is normally distributed, with a mean of 300 and a standard deviation of 100. the wholesaler can process a replenishment request in 2 days. the current replenishment policy is to order 1,500 units when there are 750 units on hand. what is the cycle service level that the pharmacy achieves with its policy?
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Following information is given for this replenishment policy:
Average Daily Demand  = 300
Standard Deviation of Daily Demand  = 100
Average Lead Time for Replenishment  = 2 days
Reorder Point  = 2 days
Reorder Point  = 750
Average Lot Size  = 1,500
Safety inventory is the inventory carried to meet the demand if it exceeds the demand forecasted for that period.
Safety inventory  can be calculated using given formula:
 …… (1)
The total demand during 2 days period is normally distributed with mean  and standard deviation  where,
 …… (2)
 …… (3)
Following information is given for this replenishment policy:
Average Daily Demand  = 300
Standard Deviation of Daily Demand  = 100
Average Lead Time for Replenishment  = 2 days
Reorder Point  = 2 days
Reorder Point  = 750
Average Lot Size  = 1,500
Safety inventory is the inventory carried to meet the demand if it exceeds the demand forecasted for that period.
Safety inventory  can be calculated using given formula:
 …… (1)
The total demand during 2 days period is normally distributed with mean  and standard deviation  where,
 …… (2)
 …… (3)
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