Question: The Uptown Bar and Grill serves Rainwater draft beer to its customers. The daily demand for beer is normally distributed with an average of 18 gallons and a standard deviation of 4 gallons. The lead-time required to receive an order of beer from the local distributor is normally distributed with a mean of 3 days and a standard deviation of 2 days. Determine the safety stock and reorder point if the restaurant wants to maintain a 90% service level during the lead-time. What would be the increase in the safety stock if a 99% service level were desired? If there is a new distributor whose average lead-time is 4 days with a standard deviation of ½ day, would you be interested in switching to this new distributor?

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