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b. The average daily demand for watermelons from Trinbago Super Farmers Limited (TSFL) is 90
units, with a standard deviation of 10 units. The review period is 28 days and the lead time is 7
days. Management has set a policy of satisfying 95 percent of the demand from items in stock. At
the beginning of the review period, there are 185 units in inventory.
(ii) A newly installed manager wants to raise the service probability requirement to 98 percent.
1. Will this result in an increase or decrease in the amount of watermelons to
be ordered?
Give reasons for your answer.
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