The manager of a construction company determined from historical records that demand for concrete during lead time could be described by a normal distribution. The standard deviation of the lead time demand is 5 tons.
The average lead time is 5 days, and the average demand rate during the lead time is 8 tons per day.
The manager is willing to accept a stockout risk of no more than 3%. What is the safety stock? What is the ROP (Reordering point)?