solution

A computer store uses the periodic review model to manage its inventory. The inventory is reviewed and counted every week. The average annual demand for a model of computer is 5,076 units. The standard deviation of daily demand is 11 units. The desired service level, i.e., probability of not-stocking-out, is 98 percent. The store is open 350 days a year. Please determine the optimal units of the computer should be ordered if, after the inventory count, the current inventory on hand for that model of computer is 34 units. It takes on average two days to receive the order since the supplier is located in the same city. Use z=normsinv(98%)=2.05 in your calculation.

Keep 3-decimal if not exact, either round up or down is ok.