The service level that the store manager wants to maintain = 0.97. This is because 3% of the time during the lead time, the store would be willing to accept a stockout. This corresponds to a service level of 97%.
The appropriate value of Z (i.e., the number of standard normal deviations) = 1.65. This can be calculated using the formula Z = (Service Level - 0.5) / (1 - Service Level).
A Safety stock = 160 units. This can be calculated using the formula Safety Stock = Z * Standard Deviation * Square Root of Lead Time.
Reorder point = 360 units. This can be calculated using the formula Reorder Point = Average Demand * Lead Time + Safety Stock.
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