KVS Pharmacy fills prescriptions for a popular children’santibiotic, Amoxycilin. The daily demand for Amoxycilinis normally distributed with a mean of 200 ounces and a standard deviation of 80 ounces. The vendor for the phar-maceutical firm that supplies the drug calls the drug-store’s pharmacist every 30 days and checks the inventory of Amoxycilin. During a call the druggist indicated thestore had 60 ounces of the antibiotic in stock. The leadtime to receive an order is four days. Determine the order size that will enable the drugstore to maintain a 99% ser-vice level.
KVS Pharmacy fills prescriptions for a popular children’s
antibiotic, Amoxycilin. The daily demand for Amoxycilin
is
standard deviation of 80 ounces. The vendor for the phar-
maceutical firm that supplies the drug calls the drug-
store’s pharmacist every 30 days and checks the inventory
of Amoxycilin. During a call the druggist indicated the
store had 60 ounces of the antibiotic in stock. The lead
time to receive an order is four days. Determine the order
size that will enable the drugstore to maintain a 99% ser-
vice level.
Given data
Average daily demand (d) = 200 ounces
Standard deviation ()= 80 ounces
Review period (T) = 30 days
Lead time (L) = 4 days
On hand inventory (I) = 60 ounces
Service level = 99%
The z value with respect to the 99% will be calculated by the following approach 
Hence, the value of z = 2.33
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