Question: Dupont Circle Drugs orders its antibiotics from a large pharmaceutical company. Tetracycline is one of the drug store's most demanded antibiotics. Annual demand is 6,000 bottles (of 50 capsules each) and the pharmacy is open 300 days a year. Each bottle costs $30 and holding costs are estimated at \(30 \%\) per year. The cost of placing an order is $10. Daily demand is normally distributed with an average of 20 bottles and a standard deviation of 6 bottles. Lead time is 5 days and DC Drugs would like to be \(90 \%\) sure that there is no stockout in any given inventory cycle.

1. What is the optimal reorder quantity?
2. What is the reorder level to be used for placing orders?

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document