1 1 Inventory Decision MakingChapter 6 (Part 3) 2 Service Level The service level represents the desired probability of not running out of stock. Example: A distributor of lawn-care products has found from sales records that annual demand for 27-10-10 fertilizer with weed killer is normally distributed with mean of 85 tons and variance of 169 tons. a)What is the probability that the annual demand exceeds 95 tons? b)What quantity (i.e., how many tons) should be produced so that there is a five percent chance of running out of stock?
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