Given this information:

Expected demand during lead time = 300 units

Standard deviation of lead time demand = 30 units

Determine each of the following, assuming that lead time demand is distributed normally:

a. The ROP that will provide a risk of stockout of 1 percent during lead time.

b. The safety stock needed to attain a 1 percent risk of stockout during lead time.

c. Would a stockout risk of 2 percent require more or less safety stock than a 1 percent risk?

Explain. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percent

instead of 1 percent? Explain.