Table $5.10$ A Firm Using the Periodic Review System (P System) Reviews

Multiple Choice

Table $5.10$
A firm using the periodic review system (P system) reviews the status of an item every 4 weeks. The standard deviation in weekly demand is 60 units. The lead time for the item is 3 weeks, whereas demand averages 200 units per week. You will need to refer to a normal table to answer the question(s) .
-Use the information in Table 5.10. Suppose the firm decides on a safety stock (B) of 245 units. It is time to review the item, and the current inventory position is 700 units. How many units should be ordered? (Hint: Before answering this question, you must first compute T, the target inventory level.)

A) less than or equal to 900 units
B) greater than 900 but less than or equal to 950 units
C) greater than 950 but less than or equal to 1000 units
D) greater than 1000 units